The Judicial College Guidelines has recommended that damages cost should rise by 5% or more
A guide which helps judges to decide how much they should award in damages in a whiplash case has recommended that the damages cost should rise by 5% or more.
The Judicial College issues guidelines every two years to assist Judges in valuing general damages in personal injury claims.
But insurer Aviva has expressed disappointment that the recommendation could push up whiplash damages inflation – at a time when the government wants to actively reduce the numbers and the cost of whiplash claims.
Aviva director of casualty claims Richard Hiscocks said: “We will see the cost of low severity whiplash claims rising above inflation at a time when the government is determined to see number and cost of whiplash claims fall.
“This will further encourage the claims management companies who bombard the public with nuisance calls and texts to claim for whiplash.
“It’s hard to understand the justification for this rise, which will see more money paid out to claims management companies and solicitors from motorists’ insurance premiums.
“We have been striving for reform in claims to reduce the cost of motor insurance for many years now through our Road to Reform activity. This decision by the Judicial College makes the job of bringing down costs to consumers much harder.”
The Judicial College Guidelines were introduced in 1992.
Prior to this if a judge wanted to value a claim they would use a historic case that closely reflected the case they were looking at and take a value from that.
In 1992 it was decided that the decision should be more scientific and guidance should be given to judges, not just from a compendium of cases.
DWF insurance partner Simon Denyer told Insurance Times: “This is going to add a significant extra layer of cost in an area where claims volumes are increasing, according to recent portal analysis.
“What drives these claims is the amount of money available in the process, either in damages or costs. And if you have damages going up that is going to be an extra factor in pushing upwards the incentives for getting and pursuing this sort of claim.”