Inflation for bodily injury claims has doubled that of average earnings during the past decade by rising an average of 12% a year, a new report finds.

And there is no sign of the trend diminishing because the UK is beginning to mimic the USA's notoriously litigious culture.

The Second UK Bodily Injury Award Report is the biggest study of its kind ever conducted in the UK.

It involved 700,000 motor bodily injury claims in the decade up to 1998 - 60% of the total.

Bodily injury claims now account for 36% of all motor insurance premium compared to 23% in 1993.

While this is partly explained by soft market conditions over this period, the rise and volume of personal injury claims has played an important part.

"Nearly half of the 12% escalation rate between 1992 and 1997 is caused by the rise in the number of people filing claims," explains Phil Ellis, an actuary at English Matthews Brockman.

"If you were in a minor road accident ten years ago you probably just claimed for damage.

"Nowadays everyone seems to have suffered whiplash as well."

The evidence shows that many of the increasing number of claims fall in the range between £5,000 to £15,000. These are precisely the claims sizes that would be expected to occur as a result of the litigious effect.

Television, and other mass media advertising of personal injury-related services, is helping to fuel this compensation culture, as is the wide use of legal expense cover and the new "no-win no-fee" arrangements offered by solicitors.

At the other end of the scale, there is also a notable increase in the number of high value claims - those over £200,000.

The changes to the Ogden Tables has had the biggest impact. The figure used to calculate the annual investment return expected for serious injury awards was dropped from 4.5% to 3%, which meant the initial payout has to be much greater.

"Although this report only covers a two-year period the extent and significance of this change has been extraordinary," the report states.

To offset some of the claims inflation, the report advises the insurance industry to pare down costs.

It suggests that rehabilitation and structured settlement could be the way forward for the largest claims.