Transport Select Committee findings receive industry approval

Open Road

The Transport Select Committee (TSC) recommendations for measures to cut the number of whiplash claims and tackle fraud have been met with general approval across the insurance industry.

The recommendations include a requirement for whiplash claimants to provide more information, such as proof that they saw a doctor or attended A&E, the reduction of the three-year period after an accident during which claims can be made, an accreditation scheme for doctors providing evidence for whiplash claimants, an annual random audit of whiplash medical reports and for medical reports to be made available to all parties.

The main bone of contention has been the rejection by the TSC of a Ministry of Justice (MoJ) recommendation to raise the threshold for cases dealt with in the small claims court, from £1,000 to £5,000. It was rejected due to concerns over reduction of access to justice.

The Forum of Insurance Lawyers (FOIL) motor focus team leader Nigel Teasdale:

“The TSC report is a valuable, common sense contribution to the whiplash debate, which should aid the Ministry of Justice in its substantive deliberations on this issue.

“FOIL was especially pleased that the committee had taken on board its proposal for the limitation period for making whiplash claims to be reduced substantially from the current three-year limit. This step alone would reduce significantly the number of fraudulent or exaggerated whiplash claims.”

AA insurance director Simon Douglas said that Britain has earned “the shameful reputation of being ‘the whiplash capital of Europe’”, and welcomed the measures.

He added: “Although the committee is cautious about increasing the small claims limit from £1,000 to £5,000, which is being considered by the justice ministry, we believe that this will prove to be a significant disincentive for those without a legitimate injury chancing their luck at winning a settlement.”

AXA UK chief executive Paul Evans:

“We welcome the calls to regulate the medical reporting system and also for a reduction in the existing three-year limitation period, which we believe should be reduced to one year without detriment to valid claimants.

“The actions necessary to see further reductions in motor premiums are on the table – we urge the government to press on with its implementation so that honest drivers no longer bear the cost of those who seek to exploit a system that is soft on fraudsters.”

The Lloyd’s Market Association (LMA) added their support, but described the rejection of reforms to the small claims court threshold as “disappointing”. LMA underwriting manager David Powell, who gave evidence to the committee said: “The committee’s decision to consult on reducing the statutory limitation period for whiplash claims is strongly supported by the LMA.

“We also welcome the recommendation to require claimants to provide better evidence to support their claims.

“The most disappointing news is that the committee has recommended keeping whiplash claims out of the small claims track (SCT) process at this time. We understand the committee’s concerns regarding vulnerable claimants, but the LMA does not accept the argument that it would be uneconomic for solicitors to represent claimants in the SCT, given the availability of damages based agreements.”

Direct Line Group managing director of claims Steve Maddock:

“The Transport Select Committee’s report highlights the need for a more rigorous medical process and tighter timescales on making a whiplash claim. This will help reduce fraud and speed up the process for those genuinely injured. However, the legal burden needs to be reduced as well and that is why we believe that increasing the threshold for claims referred to the small claims court from £1,000 to £5,000 is essential.”

Blogging on the release of the TSC report, ABI head of motor insurance James Dalton said that “what is needed is action, not further delay to facilitate more debate and discussion”.

He also noted that the small claims limit was set at £1,000 in 1991, and at that time 50% of personal injury claims fell within that limit. Currently only 9% of claims are under £1000. He said that the rejection of the proposals were “the committee simply kicking into the long grass the recommendations for change that are vitally needed”.