UK govt plans to cut down on motorist whiplash claims

The UK government said it was looking at banning insurance claims for whiplash that could save motorists £40 a year on their premiums.

Proposals from the Ministry of Justice (MoJ) released on Thursday would make payouts much harder to obtain. The department said insurers had pledged to pass on savings to drivers – worth £1bn a year.

“Whiplash claims are 50% higher than a decade ago, despite the UK having some of the safest roads in Europe and a fall in the number of accidents,” the MoJ said in a statement.

“This has been fuelled by a predatory claims industry that encourages minor, exaggerated and fraudulent claims, driving up the costs of insurance premiums for ordinary motorists.”

Andrew Morris, operations director at Aviva told the BBC that while driving on British roads is safer, with accidents reduced by almost 40% since 2000, the number of injury claims has risen by 90% over the same period.

"All of that suggests that actually there is something fundamentally wrong with our compensation system. That means cash is too easily available and that in the UK, almost 80% of every injury claim that we see relates to whiplash. Now in France, by comparison, is it just 3%," he said.

He added that in 2015 alone, motor fraud accounted for 60% of all claims fraud detected by the company.

The government's consultation paper outlines plans to scrap the right to compensation or put a cap on the amount people can claim for minor whiplash injuries.

Capping compensation would see the average pay-out cut from £1,850 to a maximum amount of £425. Compensation would only be paid out if a medical report was provided as proof of injury, the MoJ said.

It also wants to ban offers to settle claims without medical evidence. All claims would need a report from a MedCo-accredited medical expert before any payout was made. MedCo is the body charged by the government with overseeing the production of independent medical reports in whiplash claims.

Lawyers could also be removed from the process under the proposals. The MoJ said it wanted to increase the limit in small claims courts for personal injury claims to £5000 from £1000. Legal costs cannot be recovered in these courts.