Whiplash debate begins

Peers queried government assertions about fraudulent whiplash claims and raised concerns about definitions as they began the Second Reading of the Civil Liability Bill this week.

The Bill aims to reduce the cost of motor insurance premiums and tackle fraudulent whiplash claims.

However, Lord Sharkey expressed surprise that the Bill does not define ‘whiplash’ and queried whether the number of fraudulent claims is rising—government statistics published this week revealed the number of personal injury motor insurance claims has actually fallen. Some 650,019 claims were made in 2017/18, compared to a peak of 828,489 in 2011/12 and 625,072 in 2008/09.

Under the Bill, fixed tariffs would be introduced for road traffic accident claims and insurers would be banned from settling cases without a medical examination taking place. Separately, proposals are afoot to raise the small claims limit to £5,000 for road traffic accident claims—this would exclude most litigants from representation since legal costs are not recoverable in the small claims court.

Ahead of the Second Reading, the Bar briefed Peers that the government’s central argument, that the increase in whiplash claims is down to an increase in fraudulent claims, is unsupported by evidence.

In a briefing note, the Bar Council and Personal Injury Bar Association argued that a tariff was likely to increase, rather than decrease, the problem of fraudulent or exaggerated claims.

Moreover, rather than reducing the overall cost of litigating minor claims, the proposed reforms would ‘inevitably lead to a rise in the number of litigants in person, an increase in activity by unregulated claims management companies, increased costs on insurers in terms of case handling, and increased burden on an already stretched court service’, they said.

Association of Personal Injury Lawyers president Brett Dixon also criticised the Bill: ‘Injury claims are not behind rising premiums. The mischief clearly lies elsewhere.’