AA says it is ‘odd’ that the industry is having to undergo yet another motor probe
The Transport Committee has come under pressure to explain why it is launching a motor probe just as another government-led investigation ends.
The probe is happening just as the Ministry of Justice investigation on similar grounds has closed.
In addition, there is a further ministerial summit with the insurance industry that will discuss whiplash reforms, taking place on 25 March.
The AA said it welcomed the enthusiasm to understand the market, but was concerned about the “endless talking on the issue”.
“All these are steps in the right direction. But there has been endless talking on this issue and it’s hard to see how a further inquiry will add to the knowledge already amassed,” said director of AA Insurance Simon Douglas.
“It seems odd that it has taken a year to announce this inquiry at a time when a separate MoJ inquiry (Reducing the number and costs of whiplash claims) appears to have covered similar ground and has just closed.”
The new inquiry is looking to find out whether assumptions made about whiplash injury claims are correct and whether proposals put forward by the government in relation to medical evidence are likely to reduce insurance premiums.
“In my view, while there is clearly a need to bring the escalating number of often-spurious claims under control, there are steps that could usefully help – for example, fixed rates of compensation and a proportion of claims payments withheld and paid direct for treatment, such as physiotherapy,” said Douglas. “Similarly, historic claims should reflect the cost of treatment that sufferers have, or should have, undertaken.”
Douglas said he was also in favour of a system used in Germany and Austria, where collisions below a certain speed (assessed by expert analysis of vehicle damage) are deemed to be too low to result in whiplash injury.
“And, while welcoming the concept of an independent panel to assess whiplash cases, it’s hard to see how they might come to a different diagnosis from that of a GP if such injury can’t be confirmed from conventional medical tests,” he added.
Douglas said the civil justice reforms being introduced in April will go some way towards reducing personal injury claims costs.
These include rebalancing no-win no-fee deals so that losing defendants no longer have to pay success fees to the claimant’s lawyer; banning referral fees, and stopping claims management companies from offering inducements to make claims through them.
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