House of Commons - Cost of motor insurance: whiplash

Cost of motor insurance: whiplash - Transport Committee Contents

2 Whiplash: what's the problem?

What is whiplash?

9. The Government has described a whiplash injury as:[10]

The neck pain which occurs after the soft tissue in the spine has been stretched and strained when the body is thrown in a sudden, forceful jerk.

Dr Andre Brittain-Dissont, an independent medical expert who provides reports on whiplash claimants in relation to legal claims, said:[11]

The essence of the injury is that it is a muscle or ligament tear and it bleeds. As the bleeding collects, you get a muscle spasm and therefore within the first day, two days, three days or four days symptoms develop.

10. Whiplash injuries can affect daily activities which involve neck movement. Christian Worsfold of the Chartered Society of Physiotherapists said that in severe cases people can suffer from a sensitised nervous system which renders them more susceptible to pain than before.[12]

11. There are varying views about how long whiplash injuries typically last. Premex Services, a medical reporting organisation, reported to us that, reviewing nearly 280,000 reports of whiplash injuries, a prognosis of six months or less was given in 62% of cases and that only in 6% of cases was the prognosis over 12 months.[13] A survey for the Association of Personal Injury Lawyers of people who had suffered a whiplash injury found that symptoms had cleared up within "about six months" in 75% of cases. Symptoms persisted for more than one year in 20% of cases.[14] Christian Worsfold of the Chartered Society of Physiotherapy said that around 10% of sufferers of a whiplash injury still report symptoms four years from the cause of the injury. However, in his view, 50% of cases are resolved within one year.[15]

12. Whiplash injuries resulting from road traffic accidents are influenced by car design. Thatcham Research told us that seat design and the positioning of head rests were crucial in mitigating whiplash. Around one third of vehicles in the UK have seats which are designed to reduce the incidence of whiplash. However, Thatcham Research said that there is no evidence so far that improvements in seat design have reduced whiplash claims in the UK.[16]

13. There is no generally accepted objective test for a whiplash injury. Like headache or backache there is no physical manifestation of the injury and nor can it be detected by a CT or MRI scan. However, there are techniques used by medical professionals for diagnosing whiplash as well as innovative ideas for developing objective diagnostic tools, such as the use of ultrasound, as described to us by Dr Amanda Roshier.[17] There is some scepticism about whether it might be possible to develop an objective test for whiplash.[18] The Government is working to deliver better guidance on the injury and its diagnosis.[19]

14. Witnesses generally agreed that it is possible to suffer a genuine whiplash injury, even if the symptoms cannot be objectively identified.[20] However, there are sometimes suggestions from insurers and others that whiplash injuries are by definition fake.[21] Axa Insurance referred in their submission to "so called 'whiplash'" and there were also references in the evidence we received to a whiplash "epidemic".[22]

15. Whiplash injuries can arise from motor accidents and can have debilitating consequences for those who suffer them. It is appropriate that people injured in motor accidents through no fault of their own should be able to claim compensation from the party which caused the injury.

Low-velocity impacts

16. Thatcham Research argued that below very low speeds and accelerations the likelihood of a collision causing a whiplash injury was "really small". Andrew Miller, Director of Research at Thatcham, drew attention to experience in Germany in the 1990s where claims for whiplash only progressed to medical assessment if the accident happened at a speed of at least 10 km/ph (6.25 mph). He argued that if the Government wished to adopt a similar approach it would be possible to derive from biomechanical evidence a speed of impact below which injury was very unlikely.[23]

17. Andrew Ritchie QC said "there are many medical papers to show that four to five miles an hour is about the threshold" for whiplash injury to occur but argued that women and older people are more likely than men and younger people to suffer injury during low-speed impacts. In his view, there was a danger that "if you introduce a threshold, what you are really doing is excluding the vulnerable from their right to claim".[24] Dr Donal McNally, head of the Bioengineering Research Group at the University of Nottingham, said Swedish research had shown that a 10 km/ph threshold for whiplash claims would exclude 40% of the more serious whiplash injuries.[25]

18. The ABI supported a threshold speed in principle but said that current in-car technology could not conclusively demonstrate at what speed a car was travelling when involved in an accident.[26]

19. Both the ABI and Thatcham Research raised the case of Rowan v Charnock, where it was argued that the judiciary had not given sufficient weight to biomechanical evidence that the impact (in this case between a car and a stationary bus) could not have caused the injuries which were claimed.[27] However, in this case:[28]

The judge found that the totality of expert opinion allowed the possibility of injury at lower speeds, and that there was in reality no scientific threshold below which injury could not occur. This was in part because the physiological mechanism of injuries such as those the court was concerned with was itself not scientifically known. In short, the judge found it not impossible that this minor collision could have caused whiplash injuries to passengers on the bus.

This conclusion was not subject to appeal.

Number of whiplash claims

20. Table 1 shows that the number of motor insurance injury claims increased by 109% from the average for 2000-05 until 2011-12. The number fell by 9.5% last year.Table 1: Number of motor insurance injury claims notified to the Compensation Recovery Unit[29]

2000-05 average 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

395,735 466,097 518,821 551,905 625,072 674,997 790,999 828,489 749,555

We were told that 70% of these claims are for whiplash injuries but, until recently, firm figures were not publicly available.[30] However, the Government's memorandum disaggregates whiplash and other personal injury claims arising from road traffic accidents: this is shown in table 2.Table 2: Whiplash claims from road traffic accidents 2008-09 to 2012-13[31]

2008-09 2009-10 2010-11 2011-12 2012-13

Personal injury claims from road traffic accidents 625,072 674,997 790,999 828,489 819,137

Whiplash claims from road traffic accidents[32] 482,297 514,816 566,998 542,922 476,938

% whiplash claims 77.2 76.3 71.7 65.5 58.2

Taken from Ev w93, paragraph 10.

It is apparent from the information now provided by the Government that the number of whiplash claims has fallen since 2010-11 and is now lower than at any time since at least 2007-08.

21. We recommend that the Government analyse pre-2008 statistics on claims arising from road traffic accidents in order to show how the number of whiplash claims has changed since the turn of the century. We are also concerned by the emerging trend for claims for other forms of injury to increase as whiplash claims decline. We recommend that the Government provide a breakdown of these claims for other injuries since 2008-09 and an explanation of any trends.

22. It is a legal requirement for road traffic accidents in which someone is injured to be reported to the police. However, there is considerable under-reporting of such accidents. For example, in 2011, the number of people who attended hospital following a road traffic accident was more than twice the number recorded by the police as having been injured in such an accident.[33] This is a long-standing problem on which our predecessors commented in 2009 and which is now being investigated by the UK Statistics Authority.[34]

23. The absence of comprehensive statistics about road traffic accidents means that it is impossible to relate the increasing number of personal injury claims in recent years to the number of accidents.[35] Roger Carter, a businessman and former county councillor, also pointed out that this problem makes it harder for local authorities to know where to focus their spending on road improvements to enhance road safety. He suggested that the insurance industry should be required to provide details of motor accident claims to the Motor Insurance Bureau, so that data could be passed on to the relevant highways authorities to show where accidents were taking place. He also suggested that insurers should be required not to accept a claim for personal injury until the claimant can demonstrate that the accident was reported to the police.[36] We received a submission in support of this proposal from Road Safety GB and others.[37] We recommend that, in its reply to this report, the Government should give its view on how to improve the collection of data about road accidents, particularly in relation to how they could improve the detection of fraudulent personal injury claims as well as help highways authorities target spending on improving road safety.

Prevalence of fraudulent or exaggerated claims

24. There is no authoritative data publicly available about the prevalence of fraudulent or exaggerated claims for whiplash injuries and no consensus about what constitutes fraud. Estimates of the percentage of claims which were fraudulent ranged from 0.1% to over 60%.[38] These estimates were based on firms' caseloads, statistical extrapolations or survey data. Forms of fraudulent activity mentioned by witnesses included 'cash-for-crash', where crashes were caused deliberately to generate claims; claims relating to non-existent passengers; fabricated or exaggerated symptoms; or exaggeration of the impact of a genuine injury.[39]

25. Implementing a recommendation in our first report on the cost of motor insurance,[40] an industry-funded police unit dedicated to work on insurance fraud was set up at the beginning of 2012. During the year it made 260 arrests, although not all of these will have related to motor insurance.[41]

26. David Powell of Lloyd's Market Association said insurers have different definitions of fraud and different ways of measuring it.[42] Peter Gradwell of Exchange Insurance Services complained that the insurers "merrily ... rolled together" fraud and exaggeration of claims. He said:[43]

Exaggeration can't be classed as fraud. It is a matter of opinion on many occasions. Somebody's cost of something is arguable by another person ... If insurance claims were all absolutely correct ... then we would not need to have loss adjusters or claims departments of insurance companies.

27. The Government "shares the widespread concerns" that the growth in whiplash claims "may be linked to an increase in fraudulent and/or exaggerated claims" but does not give an estimate of the proportion of claims which are fraudulent or exaggerated.[44] In her foreword to the MoJ consultation document, Helen Grant MP, the Parliamentary Under-Secretary of State at the department, referred to the UK as "the whiplash capital of the world".[45] This was based on a 2004 study which showed that the UK generated a higher proportion of bodily injury claims compared to overall claims than eight of the nine other countries studied and a higher proportion of "cervical trauma" claims than any of the other countries.[46] David Brown of the Institute and Faculty of Actuaries (IFA) said international data on whiplash injuries was scarce but the IFA's research supported the Minister's conclusion.[47]

28. Legal witnesses disputed this analysis.[48] The Law Society of England and Wales said "even if data from a 2004 study was relevant today, it cannot be used in isolated from other statistics from the European insurance industry". For example, motor premiums rose more quickly in the UK between 2010 and 2011 than in France and Germany; and claims paid out fell by 6% in 2011, compared to a 2% increase in Germany and no change in France.[49] The Chartered Institute of Legal Executives said that the Government's statement was "not backed by any real evidence ... such statements sound effective, but are meaningless without detail or independent evidence to back them up".[50] The Government's claim that the UK is the "whiplash capital of the world" cannot be conclusively proved or disproved from the international evidence which is available. It is surprising that the Government has brought forward measures to reduce the number of fraudulent or exaggerated whiplash claims without giving even an estimate of the comparative scale of the problem.

29. There is considerable scope for the insurance industry to provide clearer data about the number of whiplash (and other personal injury) claims which it is confident are genuine and those which give cause for concern, ranging from the out-and-out fraudulent to those where symptoms may have been exaggerated. Industry-wide agreement about how to classify claims and the collection of data by the ABI would strengthen the case for the Government to act. We recommend that the Government press the ABI to provide better data about fraudulent or exaggerated personal injury claims, so that there is a stronger evidence base for policy decisions.

30. The growth in personal injury claims in recent years reflects an increasing tendency for people to exercise their legal rights, particularly following the introduction of 'no win, no fee' arrangements and the activities of claims management companies and others in encouraging people to make claims. Insofar as access to justice has been easier to obtain to rectify genuine losses resulting from road traffic accidents this is not necessarily a negative development, although it has inevitably increased motor insurance premiums.[51]

31. However, we accept that some of the increase in the number of whiplash claims will have been due, in the main, to fraud or exaggeration, even if it is not possible to give even a rough estimate of the scale of the problem. Since our first inquiry into this issue in 2010-11 we have received ample correspondence from members of the public complaining that after a road traffic accident they are bombarded with telephone calls, text messages, emails and correspondence inviting them to claim, even where no injury has been sustained, and offering an easy pay out.[52] We have also heard worrying evidence about how few claims are contested, because of the difficulties and cost of doing so.[53] This is an issue we will discuss in our next chapter.