Justice secretary Chris Grayling set to launch consultation on creating independent medical panels to improve diagnosis
The government will unveil plans to reduce the huge number of whiplash claims which have been pushing up insurance premiums.
Justice secretary, Chris Grayling, will on Tuesday launch a consultation on creating new independent medical panels to improve diagnosis of whiplash injuries.
This aims to ensure that genuine claims can still go ahead, but exaggerated, misrepresented or fraudulent claims are robustly challenged.
It will also consult on options to allow more whiplash cases to be challenged in the small claims court and to change the current position where it can be cheaper for insurance companies to accept questionable claims than to contest them.
“For too long honest drivers have been bearing the price of a system that has been open to abuse and it is time for that to change,” Grayling said.
“We are proposing action to support effective whiplash diagnosis by medical experts and to simplify procedures which will help bring speculative or fraudulent claims before a judge – so genuine claims can still be settled but fraudsters are left in no doubt there will be no more easy paydays.”
The government said it has taken action after figures showed there had been a 60% rise in personal injury claims related to road accidents since 2006, despite vehicles becoming safer and a 20% reduction in the number of reported accidents over the same period.
It estimated that whiplash claims cost £2bn in 2010 or £90 for each policy.
This is the latest stage of a series of significant civil justice reforms by the government, designed to reduce legal costs and stop the growth of compensation culture in England and Wales.
Tuesday’s consultation complements law changes which will come into effect in April 2013.
They will include rebalancing no-win no-fee deals so losing defendants will no longer have to pay a success fee or legal insurance premium to the claimant’s lawyer.
It will also include banning “referral fees” where companies can profit from selling on someone’s personal injury claim and stopping claims management companies from offering money or goods as an inducement to make a claim through them.
The insurance industry has committed to passing on savings to consumers made from the reforms to civil litigation costs, the government said.
James Dalton, head of motor and liability at the Association of British Insurers, said: “We are pleased that the government recognises that tough action is needed to protect honest motorists from the UK’s whiplash epidemic. For too long, whiplash has been seen as the “fraud of choice”.
“Our roads are safer, yet every day over 1,500 whiplash claims are made. These claims add an extra £90 a year to the average motor insurance premium.
“More effective diagnosis of whiplash will help genuine claimants get paid out quickly and reduce the scope for fraud, so helping to ensure that honest motorists do not end up footing the bill for the cheats through higher insurance premiums.”