Despite an 11% fall in the number of road collisions in 2011, personal injury claims rose by 18% (BBC News).
A report from the Actuarial Profession says that a higher proportion of people involved in accidents are making claims for personal injury, such as whiplash, and that this may cost the insurance industry an extra £400m a year.
The Government is planning new laws to limit the amount of money that firms can make from ‘no win no fee’ cases. The legislation, announced in March 2011 by Justice Secretary Ken Clarke, would prevent lawyers claiming “success fees” from the losing side. Instead they would receive a share of the damages.
The proposals follow a review carried out by Lord Justice Jackson in 2010, at the request of the previous Government. The legislation also aims to prevent insurance companies and others from passing on motorists’ details after a collision.
BBC legal correspondent Clive Coleman said that increases in the number of claims could result in higher insurance premiums. He added that the report builds on an earlier one from the same organisation which shows a clear correlation between injury claim hotspots and the location of claims management companies.
Click here to read the full BBC News report.