Friday, June 7, 2013

Is the UK in a whiplash claim epidemic?

Brought to you by our friends at YouClaim

MPs in the Transport Select Committee are currently investigating the extent to which whiplash claims are pushing up the general cost of car insurance in its consultation; “Cost of motor insurance: whiplash”.  Despite recent government figures showing that whiplash claims are at a five-year low, the insurance industry claims that a rise in whiplash claims in recent years has added around £118 to the average insurance policy for British motorists.  

On top of several changes already introduced by the Ministry of Justice recently to combat the cost of these claims after consulting with insurers, the Transport Select Committee has  held two inquiries into the cost of car insurance over the past three years.  This latest investigation, which is due to take further oral evidence on 17 June, focuses solely on the cost of whiplash claims to car insurance and is seeking to bring balanced answers to some of questions raised in the ongoing row between insurers and personal injury lawyers over who is to blame for the nation’s whiplash woes. 

Defendant Insurers vs. Claimant Personal Injury Lawyers
According to the Association of British Insurers, whiplash injury payouts cost motorists £1 in every £5 of an average car insurance premium. They are of the belief that Britain has become the whiplash capital of Europe, with the injury being the ‘fraud of choice’ for those wishing to pursue dubious claims in the hope of winning large payouts. They have suggested that drivers are encouraged by lawyers to make exaggerated claims which are pushing up premiums. Insurers have been calling for more vigorous medical examinations from independent accredited medical professionals to leave little room for doubt that the claim is genuine.

But Personal injury lawyers believe that insurers’ plans to curb whiplash claims are fatally flawed, would only serve to boost their own profits rather than bring down insurance premiums and ultimately make it more difficult for genuine claimants who have suffered a whiplash-style injury.  They say that some of the proposed changes, such as raising the small claims court limit for road traffic accidents, will make it harder for injured car accident victims to get the compensation they are entitled to and the proposals would put people off making genuine claims. Rather than focussing the spotlight on lawyers offering the people the chance to claim, lawyers believe that the emphasis should be on ensuring the insurance industry passes on savings to customers; something that, despite the recent reforms, the insurance industry has not provided a concrete promise on yet, and something that some insurers have already said is unlikely to happen.  

Personal injury lawyers are also keen to point out that an independent survey has shown that the involvement of an independent lawyer not only raises the average value of an offer of settlement by nearly £13,000, it also ensures that injury victims are not offered less than their claim is worth – something insurers have been known to do in order to get rid of a claim quickly. 

Who is to blame?
There is no doubt that there is a perception we are living in a compensation culture, something fuelled by the number of adverts on television for personal injury solicitors and regular articles in the press about people claiming compensation after accidents, many of which do not show lawyers in a very flattering light, play a huge part in this collective belief. . When faced with this media bombardment about personal injury claims on one hand and rising car insurance costs on the other, it is hard not to put the blame at the feet of the thousands who make whiplash claims every year, and insurers would say they have no choice but to increase premiums in the face of so many potentially false claims.

However the Association of Personal Injury Lawyers (APIL) would highlight that they are keen to work with insurers to root out false claims, and not allow them to go unchecked.  The ABI’s proposals to the Government do have the potential to put genuine whiplash sufferers off pursuing claims, particularly if the MoJ decides to raise the limit for making road traffic accident claims in the small claims court as it will force a lot of whiplash sufferers to seek recompense without a lawyer, so it is clear that the two sides are far from being able to come together with one solution that satisfies everyone.  What is clear however, is that any additional reform that the Government choose to introduce over and above its recent changes to Personal Injury law must be done with the best interests of injured victims in mind.

Danielle Gibson is a contributor to YouClaim, who work with specialist solicitors that help those with legitimate whiplash injuries to make a claim for compensation.

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