Whiplash backlash

The small-claims threshold for whiplash and road-traffic claims could be raised from £1,000 to £5,000, under Ministry of Justice (MoJ) proposals to curb the number of fraudulent claims. The MoJ consultation, Reducing the Number and Costs of Whiplash Claims, also proposes setting up independent medical panels to determine whether claims are genuine.

According to James Dalton, head of motor and liability insurance at the Association of British Insurers, 1,500 whiplash claims are made each day, adding £90 to the average annual motor insurance premium. He says: “More effective diagnosis of whiplash will help genuine claimants get paid out quickly and reduce the scope for fraud.”

However, Iain Stark, chairman of the Association of Costs Lawyers, says the proposals “could spell disaster for both consumers and the legal profession. Access to justice will be the ultimate victim. I foresee a whole new unregulated industry being created to handle claims below £5,000. Furthermore, the courts will be flooded with litigants in person, which will put huge strain on their already limited resources”. He adds: “It is said that we all pay an extra £90 on our insurance because of whiplash claims and so the government must hold insurers to account if premiums do not fall as a result. And maybe the authorities should do more to prosecute those bringing fraudulent claims.”

Claimant lawyers also oppose the plans. Mark Grover, chief executive of personal injury firm Antony Hodari & Co, says: “Though fraud is a problem, the vast majority of claims are legitimate; raising the small-claims limit will just mean that an injured person will have to go head to head in court against the insurer’s lawyer. How many of us would want to do that?”