Reducing the Number and Costs of Whiplash Claims

Between 2006 and 2012 the number of reported road traffic accidents (RTAs) fell by around 20% yet the number of claims for personal injury arising from RTAs rose by 60%. Of these some 70% are for whiplash injuries, with 2.7 claims for such injuries being made for every accident reported. Other European countries have much lower claim rates: Germany 47%, Spain 32%, France 3%. The impact on the cost of motor insurance is significant, with £90 of the average premium stemming from the cost of whiplash injuries. The Government and the insurance industry are committed to action to reduce the cost of motor insurance and to deter fraudulent and exaggerated claims. The measures in this consultation paper look to remedy two areas where the current arrangements are imperfect: the difficulties in diagnosing the injury; and the nature and cost of the court system that can work against insurers challenging suspect claims. Diagnosis could be improved through a system of independent medical panels. In the courts, the proposals look at the small claims track threshold for personal injury claims arising from RTAs, which would provide a more cost effective route for straightforward claims and self-represented litigants. The Government also invites further ideas to address this complex issue.