Conclusions and recommendations
Number of whiplash claims
1. 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.
(Paragraph 20)
2. 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.
(Paragraph 21)
3. 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. (Paragraph
23)
Prevalence of fraudulent or exaggerated claims
4. 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. (Paragraph
28)
5. 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. 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.
(Paragraphs 24 and 29)
6. 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. (Paragraph 31)
Prime Minister's summit on motor insurance
7. We
were disappointed to hear from witnesses from the legal profession
that they had not been invited to the Prime Minister's summit
and nor are we aware of any substantive contact with DfT ministers.
This is particularly surprising given that legal reforms were
clearly under discussion. (Paragraph 32)
Medical reports
8. We
support the proposal that there should be an accreditation scheme
for medical practitioners (who need not all be doctors) who provide
medical reports in relation to whiplash claims. We also agree
that these reports should be available equally to all parties.
However, it is essential that the practitioners instructed to
prepare such reports are provided with information about the accident
and the claimant's medical records. Reports prepared without this
information are likely to be of very limited value. (Paragraph
37)
9. The MoJ should
explain whether it wishes to mandate for general use the standard
medical report form already used for whiplash claims processed
using the electronic portal, or introduce an altogether new form.
In the latter case, the Government should explain why a new form
is needed. (Paragraph 38)
10. In our view, a
random audit of at least a proportion of medical reports prepared
each year is essential. We also question whether existing regulatory
bodies such as the General Medical Council could have a role in
auditing reports and receiving and dealing with complaints about
the quality of reports under these new arrangements. We recommend
that the Government consider this issue. (Paragraph 39)
11. We recommend that
the Government explain the rationale for the three-year limitation
period and bring forward recommendations for reducing it. (Paragraph
40)
12. We recommend that
the Government consult on ways of requiring whiplash claimants
to provide more information in support of their claim, such as
proof that they saw a medical practitioner shortly after the accident
or evidence of the impact of the injury on everyday life. There
should be a presumption against accepting claims where such information
is not provided. (Paragraph 41)
Use the small claims track?
13. There are good arguments for and against switching whiplash claims of between £1,000 and £5,000 to the small claims track, but on balance we do not support this proposal at the present time. We believe that access to justice is likely to be impaired, particularly for people who do not feel confident to represent themselves in what will seem to some to be a complex and intimidating process. Insurers will use legal professionals to contest claims, which will add to this problem.
(Paragraph 50)
14. It would be financially difficult for many solicitors to assist litigants fighting personal injury claims using the small claims procedure, given the limited fees available. However, we are concerned that some claims management firms might find a way to enter the process, fuelling another boom in their activities.
(Paragraph 51)
15. We are also concerned that use of the small claims track could prove counterproductive in efforts to discourage fraudulent and exaggerated claims.
(Paragraph 52)
16. We recommend that
the Government analyse the impact of the electronic portal on
claims management and costs before reconsidering whether to increase
the threshold for whiplash claims to be dealt with using the small
claims track. (Paragraph 53)
17. We also recommend that the MoJ consider ways in which use of the small claims track could be combined with the routine submission of expert evidence, such as a medical report, to help restrict opportunities for fraud and exaggeration. The MoJ should consider further ways in which litigants in person could be assisted to use the small claims process, particularly in order to counter the inequality of arms likely to arise in personal injury claims.
(Paragraph 54)
Acceptability of fraud and exaggeration
18. We
recommend that the Government provide further details of what
its work to tackle perceptions that exaggerated claims are acceptable
involves. (Paragraph 55)
19. We recommend that
the Ministry of Justice give its view on the issues involved in
limiting the right to compensation where it can be shown that
a claim is grossly exaggerated. (Paragraph 58)
Data sharing
20. Insurers
and lawyers have a strong interest in preventing fraud so it is
disappointing to hear legal witnesses say that progress in data
sharing has been slow. We recommend that the Government encourage
both parties to establish collaborative arrangements aimed at
identifying and deterring potentially fraudulent claims. (Paragraph
59)
21. We would be grateful
for an update on progress with the project to enable insurers
to gain real-time access to the DVLA database. (Paragraph 60)
Conclusion
22. 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.
(Paragraph 15)
23. Although it may
make economic sense for an individual insurance firm to settle
a claim without medical evidence or to pay out even if fraud or
exaggeration is suspected, the industry as a whole is damaged,
and motorists pick up the bill in the form of higher premiums.
Insurers must immediately put their house in order and end practices
which encourage fraud and exaggeration. If not, the Government
should take steps to protect motorists. (Paragraph 63)
24. We recommend that
the Government explain how it will monitor whether or not motor
insurers honour their commitment to ensure that any cost reductions
resulting from proposed legal reforms are passed through to consumers
in the form of lower premiums. (Paragraph 64)
25. We recommend that
the Government take a more strategic approach to tackling the
cost of motor insurance premiums, bringing together action by
the MoJ, Department for Health and DfT, as well as any future
implementation of Competition Commission recommendations, under
a single ministerial lead. (Paragraph 65)
26. It is regrettable
that the motor insurance sector ignored our recommendation that
consumers are entitled to know more about the financial and other
links between their insurer and the many companies typically involved
with each claim. Transparency breeds trust and confidence in the
market. Unfortunately, the motor insurance sector remains as opaque
as ever. This needs to change. (Paragraph 66)
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