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News | Published February 24 2019

Fall in whiplash claims and a change in the law

In December the Ministry of Justice released statistics showing the number of new personal injury claims had fallen to its lowest level in nearly seven years.

The Law Society Gazette reported that the 30,513 personal injury claims issued in county and magistrates’ courts in quarter three of 2018 was 20 per cent lower than the same period in 2017.

The MoJ said the decrease was partly down to reforms made to the whiplash rules and partly down to a change in the civil procedure rules around package-holiday gastric illness claims.

The gazette said there was a growing body of evidence showing personal injury claims were in decline, even before the Civil Liability Bill became law after receiving royal assent in December.

Unveiling the planned reforms in March 2018, David Gauke said: “The number of whiplash claims has been too high for too long, and is symptomatic of a wider compensation culture.

“We are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday and that money can be put back in the pockets of millions of law-abiding motorists.”

Before the act received royal assent insurance giant Aviva made the case for it in Insurance Business UK.

Claims Director for Aviva UK General Insurance Andrew Morrish said: “Insurance fraud is a crime, and as our figures show, it is big business.

“Our customers are telling us they are sick and tired of paying for fraud through inflated premiums. But it doesn’t have to be like this.

“The Civil Liability Bill is a rare opportunity to remove the financial incentives that are at the heart of motor insurance fraud and drive the UK’s compensation culture – including the 900 million nuisance calls and texts made annually which try to encourage people to claim for an injury, often regardless of whether they’ve even been in an accident.”

The law increases the small claims limit to £5,000 for road traffic accident claims and £2,000 for other personal injuries claims. It will also now be unlawful to settle a claim without medical evidence.

The government has previously banned after-the-event insurance and referral fees, while lowering fixed costs for whiplash claims.

Referring to the reduction in personal injury claims, the Association of Personal Injury Lawyers president, Brett Dixon, told The Law Society Gazette: “If this reduction is because fraudulent claims have been tackled then that’s great of course, but if it is because genuinely injured people are denied justice then we have a serious problem.”

In March the government estimated the clampdown on whiplash claims would save motorists £35 per year in insurance premiums.

The Ministry of Justice said road traffic accident personal injury claims are 50 per cent higher than they were a decade ago, despite the fall in the number of reported accidents.

However, the measures will not come into effect until April 2020.


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The Parliamentary Review

@theparlreview
February 24 2019

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