Last month the government unveiled measures to reduce the costs of motoring, one of which is cutting the cost of insurance. In particular it plans to crack down on whiplash fraud which insurers say costs them £2 billion a year in payouts and adds an average of £90 to premiums.
Although any measures aimed at reducing insurance premiums for motorists are to be welcomed, the government’s own figures reveal that whiplash claims have fallen by almost 24,000 in the last year. However at 547,405, the figure is still relatively high. Under these latest reforms, the government plans to set up approved medical panels to assess the credibility of whiplash claims. However, the existing rules regarding compensation claims already deal with this issue by requiring claimants to provide evidence to support their claims. To date, insurers have adopted a practice, of making “pre-med” settlement offers to claimants without sight of medical evidence.
The government has failed to acknowledge that the real cause of fraudulent claims are the insurers themselves who have for years willingly sold data to third parties and made settlement offers in cases where they have seen no medical evidence.
Out of touch with what is happening
What is likely to happen under these reforms is that any “approved agency” will profiteer from the claims industry with motorists picking up the cost through their insurance premiums. Medical report fees will ultimately add to the costs of claims and if these can only be provided by “approved” agencies, this will create a monopoly. This is an unnecessary measure given that there are competent doctors throughout the UK who already provide this service.
The government has tarred the whole claims industry with the same brush and furthermore their recommendations are out of touch with what is happening in Scotland. A recent report on the funding of civil litigation stated that the data provided did not show evidence of the same compensation culture in Scotland, which has taken hold in England and Wales. One reason may be that there is not the same saturation in the market with only 20 specialist personal injury firms in Scotland compared with 4,000 in England and Wales.
• Scott Whyte is head of litigation at Watermans Solicitors