Civil Liability Bill will tackle “compensation culture” says David Gauke

The government’s whiplash crackdown will save motorists about £35 a year on their premiums, according to Justice Secretary David Gauke.

The government announced this morning that it will launch the new Civil Liability Bill in the House of Lords today. It is expected to come into law next April.

Gauke said the new law is part of a wider programme “to tackle the compensation culture which is driving up costs to consumers and taxpayers”.

He said the bill’s changes to the way the Ogden personal injury discount rate is calculated will bring “certainty and transparency to the system, and savings for the NHS”.

He said the measures follow earlier reforms including the forthcoming ban on cold calling, tougher regulation of claims management companies, and a clampdown on spiralling holiday sickness claims.

“The high number of whiplash claims has contributed to increased insurance premiums but these measures will mean about £1bn in savings which insurers have pledged to pass on to drivers,” he said.

“The number of whiplash claims has been too high for too long, and is symptomatic of a wider compensation culture.

“We are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday and that money can be put back in the pockets of millions of law-abiding motorists.”

Road traffic accident related personal injury claims are 50% higher than a decade ago, despite the fall in the number of reported accidents and the UK having some of the safest roads in Europe, according to the Ministry of Justice.

“This rise has been fuelled by predatory parts of the claims industry that encourage minor, exaggerated and fraudulent claims, driving up the costs of insurance premiums for ordinary motorists,” it said.

The bill will raise the small claims limit from £1,000 to £5,000 under which threshold claimants won’t be able to claim legal costs. It will set up a tariff of fixed compensation for injuries, and disallow claims without medical evidence.