Government to ‘crackdown’ on whiplash claims

12.00 | 17 November 2016 |

The Government has launched a consultation on proposals which will reduce the ‘unacceptably high’ number of whiplash claims.

Announced by the Ministry of Justice today (17 Nov), the move is designed to help insurers cut premiums. Insurers have pledged to pass on savings to drivers – worth a total of £1bn.

The RAC has ‘broadly welcomed’ the move, but says it is crucial that people with genuine claims are not disadvantaged.

Government figures show that whiplash claims are 50% higher than a decade ago. It says this has been fuelled by a ‘predatory claims industry’ that encourages minor, exaggerated and fraudulent claims, driving up the costs of insurance premiums for motorists.

The consultation paper, which will run until 6 January, outlines plans to scrap the right to compensation or put a cap on the amount people can claim for minor whiplash injuries.

The Government suggests that capping compensation would see the average payout cut from £1,850 to a maximum of £425. Compensation would only be paid if a medical report was provided as proof of injury.

Elizabeth Truss, justice secretary, said: “For too long some have exploited a rampant compensation culture and seen whiplash claims as an easy payday, driving up costs for millions of law-abiding motorists.

“These reforms will crack down on minor, exaggerated and fraudulent claims. Insurers have promised to put the cash saved back in the pockets of the country’s drivers.”

Mark Godfrey, RAC director of insurance, said: “We broadly welcome the announcement by the Government that there is to be a crackdown on bogus and exaggerated whiplash claims.

“There is an important balance to strike here though – while bogus claims must be stamped out, it is crucial that motorists that have genuine claims are not disadvantaged, which is why we now look forward to seeing the finer detail of the Government’s proposals.

“Insurers have pledged to pass on savings brought about by the whiplash claim crackdown announced today – it is imperative that they follow through with this commitment to the benefit of honest motorists.”

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