Whiplash and minor injuries reform inaction has left motorists picking up costs of £5m per day since George Osbourne’s 2015 Autumn budget, says Aviva

£2.7bn has been paid out for short-term and minor injuries since George Osbourne proposed whiplash reforms in the Autumn budget, according to research by Aviva. The cost to motorists is £5m per day.

On top of this, nearly £1bn has been paid out in legal costs. This would not happen if reforms cutting compensation and preventing lawyers from recovering low value claims costs took place, says Aviva. 

The insurer has vowed to pass on “100%” of the savings from the Financial Guidance and Claims Bill and the Civil Liability Bill to its customers when they come into law.

However, recent figures from pressure group Access to Justice has suggested that just £16 per year on average could be passed onto motorists once whiplash reforms come into force, down from £50.

Compensation culture

Aviva pins some of the problem of costs for motorists on the compensation culture that has been born out of the current system for claims. 

Since the 2015 Autumn Statement, there have been at least 36,000 cash for crash incidents, according to Aviva’s data*. 

The insurer had to decline one in seven third party whiplash claims last year due to proven or suspect fraud.

Aviva also had to defend around 1,200 customers who had been wrongly accused by fraudsters of injuring someone or causing a collision. It won almost three-quarters (73%) of such cases and secured over 250 findings of fundamental dishonesty. 

Aviva UK general insurance claims director Rob Townend commented: ““Thanks to strong action by the Courts and greater awareness of fraud thanks to media attention, we are beginning to see a slight reduction in the number of spurious injury claims. But as Aviva’s research shows, the cost of the UK’s compensation remains at an unacceptable level, fuelled by fraudsters, opportunists, lawyers and claims management companies and paid for by honest motorists. ”

“It is clear that the personal injury reforms are desperately needed to help offset the doubling of insurance tax and a cut to the discount rate which have pushed the cost of motor insurance to record levels. Aviva stands by its promise to pass on 100% of the savings from both the Financial Guidance and Claims Bill and the Civil Liability Bill as and when they come into force.”

Townend concluded, “Now is the time for Government to bring forward legislation to relieve pressure on motor premiums. We understand that the Government has had an unprecedented agenda since the end of 2015. But we don’t think it’s fair that our customers have to continue to pay for a broken system which financially incentivises opportunists and fraudsters.”