Finally an end to fraudulent minor injury car crash compensation claims?

Whiplash claims for whiplash increased up to 9% on 2013-14 but with new plans being unveiled motorists could save up to £1billion a year which could result in insurance bills being reduced by £50.

Ministers are looking to ban compensation for minor whiplash injuries in car accidents to stop the ever increasing number of fraudulent claims being made which add an estimated £93 to every households overall insurance bill every year.

The Ministry of Justice are in the process of drawing up plans to put a stop to a person’s right to make a cash claim for minor injuries but instead the claimants may only have rehabilitation treatment funded which will save motorists around £1billion a year.

As it stands personal injury lawyers are able to take minor cases to the small claims court from as little as £1,000 however under the new rules this threshold will increase to £5,000 which will also show a reduction in legal costs.

It seems that this could be great news for people who pay for insurance premiums as the Government predict that the new regulations could cut up to £50 off of car insurance as the new regulations aim to reduce bogus claims and unnecessary pay outs. With this good news, leading insurers have promised to pass on savings to their customers.

MP’s have described the UK as the ‘Whiplash Capital of Europe’ as 80 percent of road traffic accident injuries involve some form of whiplash – compared to a shocking 3 per cent in France. The new measures are designed to eliminate the dishonest claims and also the exaggerated injuries as a result of car accidents and bring that 80 per cent right down.

Justice Minister Lord Faulks said: ‘We are determined to crack down on the culture of fraud and exaggerated claims in the motor insurance industry, which means car owners are forced to pay higher premiums to cover the false claims of others. This culture is boosted by an industry that encourages exaggerated claims through cold calling and it is right that we tackle this.’

Mark Wilson, chief executive officer of Aviva, the UK’s largest insurer, said: ‘We welcome this bold and necessary step by the Government on behalf of honest people – it is all about standing up for the consumer against the fraudsters.’

‘The Government is putting the brakes on the whiplash gravy train. Sadly, law abiding motor customers have paid for the UK’s dysfunctional and fraudulent motor claims system through inflated motor premiums.’

It seems the Government are clapping down heavy on how law firms and management organisations obtain new clients as they have now been banned from using certain marketing tactics such as offering luxury items like iPads and shopping vouchers to ‘victims’.  They have also placed a ban on these firms offering referral fee’s to insurance companies.

The law firms are also facing a clamp down on the fee’s the companies can receive for these claims as well as there now being a list of approved independent doctors to assess the victim’s injuries.

James Dalton, director of general insurance at the Association of British Insurers, said: ‘The Government reforms are a significant breakthrough in tackling the UK’s compensation culture and are good news for motorists.

‘The end to cash compensation, for low value injuries, will help to bring down unnecessary costs in the motor insurance market and honest motorists should be the beneficiaries.’