A Government U-turn on legislation which will outlaw whiplash claims has been welcomed by motoring groups.
In October, the Government said it did not see any need to change the law which has seen a dramatic escalation in false injury claims, but now there will be another look at the problem.
The AA has welcomed the change of heart by the Ministry of Justice in setting new plans for further reforms to bring down the number of fraudulent whiplash injury claims, that add at least £40 to the cost of every car insurance policy bought.
The Ministry of Justice has today announced a consultation on proposals which, following the change of Government leadership, appeared to have been shelved.
This is at a time when the average car insurance premium quote, according to the AA’s benchmark British Insurance Premium Index has risen by more than £80 over the past 12 months.
Michael Lloyd, the AA’s director of insurance said, “AA members are rightly concerned about the upward pressure on the cost of running a car, not least the rising cost of insurance.
“That there over 800,000 small injury claims registered through the Ministry of Justice small claims track last year, of which 750,000 are estimated to be whiplash injury claims** is, frankly, shocking. It’s little wonder that the UK is shamefully regarded as the whiplash capital of the world.
“We would particularly welcome capping of compensation for minor injury to £425, paid only on medical proof of injury; banning offers to settle without medical evidence and a more transparent tariff of compensation for more serious injury.
“We would also like to see the banning of injury compensation altogether for very minor collisions and payment of compensation mostly in the form of care, such as physiotherapy, rather than all in cash.”
RAC director of insurance Mark Godfrey added, “We broadly welcome the announcement by the Government that there is to be a crackdown on bogus and exaggerated whiplash claims.
“The present system is now widely regarded as broken and in need of reform – in recent years insurers have been inundated by false or inflated claims which are unfairly pushing up premiums for all motorists in the UK. This is in addition to other, unrelated costs which are further increasing the cost of insurance, such as the two recent rises in Insurance Premium Tax.
“There is an important balance to strike here though – while bogus claims must be stamped out, it is crucial that motorists that have genuine claims are not disadvantaged, which is why we now look forward to seeing the finer detail of the Government’s proposals.
“Insurers have pledged to pass on savings brought about by the whiplash claim crackdown announced today – it is imperative that they follow through with this commitment to the benefit of honest motorists.”