Insurers and motorist groups celebrated government plans to get tough on bogus whiplash claims.
Motor insurers have clamoured about the inflationary impact of whiplash claims over recent years. They have said that despite a generally soft insurance market, motor premiums have soared because of spiralling personal injury claims.
However, despite a stop-start approach from the government on whiplash reforms, justice secretary Liz Truss will today say that now is the time to get tough:
For too long some have exploited a rampant compensation culture and seen whiplash claims an easy payday, driving up costs for millions of law-abiding motorists.
These reforms will crack down on minor, exaggerated and fraudulent claims. Insurers have promised to put the cash saved back in the pockets of the country’s drivers.
The ministry of justice estimated aggregate savings could top £1bn, or around £40 per driver per year.
Motor insurers, many of which feared a government crackdown had been shelved, responded with glee.
“These proposals bring us a step closer to saying good riddance to the ‘whip-cash’ merry-go-round,” said Aviva claims director Rob Townend.
Meanwhile, Direct Line said the plans provide a “strong signal”, while Axa “wholeheartedly” welcomed government proposals that include a ban on settling claims without medical evidence, measures to allow more cases to be heard in small claims courts and a standardised tariff for injury compensation.
The AA’s director of insurance Michael Lloyd also hailed the news. He added: “It’s little wonder that the UK is shamefully regarded as the whiplash capital of the world.”
RSA, which owns the More Than brand, corroborated the government statement that reforms “would ultimately result in the reduction in premiums for the ordinary motorist". Allianz agreed, calling it “great news for the motorist”.
Personal injury lawyers were outraged. Qamar Anwar, managing director of First4Lawyers said: “These proposals are far worse than anyone could have anticipated and do nothing other than to benefit the insurance industry fat cats at the expense of innocent accident victims.”