You may remember an earlier post in May 2015 regarding our compensation culture WHIPLASH CLAIMS REVVED UP!!! It was about the UK’s high volume of fraudulent, staged or extremely exaggerated claims.
This is the government answer to the situation.
It was announced earlier this month within the Autumn Statement in Parliament that the government is set to remove the right for general damages on minor soft tissue injuries and increase the small claims limit for personal injury claims from £1,000 to £5,000.
Whiplash claims cost the country £2bn a year, an average of £90 per motor insurance policy (figures from the Association of British Insurers) which is out of all proportion to any genuine injury suffered.
This will end the cycle in which responsible motorists pay higher premiums to cover false claims by others.
The government is determined to crack down on the fraud and claims culture in motor insurance
As the upper limit for these claims will be increased from £1,000 to £5,000, more injuries cases will be processed via the small claims courts.
By eliminating the need for over half a million pre-trial hearings and the added investment of more than £700 million on modernisation and fully digitising the courts, you’ll see magistrates moving away from a paper process to an on-line system, thus significantly reducing court hearing times and the amount of time spent on basic administrative functions.
The Treasury went on to say; “The government is determined to crack down on the fraud and claims culture in motor insurance”.
It will remove over £1bn from the cost of providing motor insurance and we can expect the insurance industry to pass an average saving of £40 to £50 per motor insurance policy on to consumers.
This will hit the claimant personal injury sector very hard and could possibly result in the closure of many personal injuries companies and the only ones who will benefit will be the Insurance industry.
The government intends to introduce measures to end the right to cash compensation for minor whiplash injuries and will consult on the details in the New Year.