Conclusions and recommendations
Better data
1. We
reiterate our earlier recommendation that the Government should
act to ensure that there exists better data about fraudulent or
exaggerated personal injury claims, so that there is a stronger
evidence base for policy decisions. Since the Government has cited
the ABI's figures for dishonest claims in 2013 it should explain
how the figures have been arrived at and how dishonest claims
have been defined. (Paragraph 6)
Use of small claims procedure
2. We
recommend that the Government inform us of what work is underway
or planned to develop adequate safeguards to protect claimants
from adverse consequences of raising the threshold for using the
small claims procedure for personal injury cases. (Paragraph 11)
Medical panels
3. Although
we welcome the Government's obvious desire to get on with establishing
independent medical panels as soon as possible, we are concerned
that numerous detailed matters are being decided hastily and,
in some cases, without much consideration of different options.
We recommend that the Government publish for consultation comprehensive
proposals for how medical panels will work, in time for the new
system to be introduced by next Easter. (Paragraph 15)
4. In our view, medical
reporting organisations should be prohibited from providing reports
on whiplash and other soft tissue injuries for claims being pursued
by solicitors belonging to the same business structure. Furthermore,
a robust accreditation system should provide mechanisms for penalising
practitioners whose work is influenced by their view of what the
claimant might want in a report. We welcome the Government's intention
to act in this area. (Paragraph 17)
5. We recommend that
the Government explain how it will prevent small firms being squeezed
out by the introduction of independent medical reporting panels
for whiplash and related injuries. (Paragraph 18)
Striking out exaggerated claims
6. We
call on the Government to clarify how and when it intends to introduce
measures requiring courts to throw out compensation applications
in full where the claimant has been fundamentally dishonest. Although
we broadly support this initiative we would caution against hasty
legislation: the legal issues need to be fully thought through
so that the eventual solution is effective and does not have unintended
consequences. (Paragraph 22)
Inducements to claim
7. Inducements
to claim are likely to have encouraged fraudulent claims so we
support the Government's intention to ban them. We call on the
Government to publish details of how and when this change will
be made. (Paragraph 25)
Pre-medical offers
8. We
are in no doubt that fraudulent and exaggerated claims have been
encouraged by the insurers' practice of paying out for whiplash
claims without requiring a medical examination. We strongly agree
with the Government's intention to prohibit such offers, as part
of the new system for independent medical panels for diagnosis
and reporting. (Paragraph 28)
9. Problems caused
by claims for injuries sustained months or years ago could be
ameliorated by reducing the period in which claims can be made
or by requiring firmer contemporary evidence of the impact of
the injury. We have made the case for these changes previously,
although the Government has not yet been persuaded. In our view,
these changes will be required to make the system work effectively.
(Paragraph 29)
10. It is unfortunate
that the ABI should argue that action to tackle fraudulent and
exaggerated claims, by insisting on medical examinations, will
increase premiums. We would have hoped for a firmer commitment
from the industry to driving out fraud. In our view, money saved
from reducing fraudulent and exaggerated claims should more than
compensate for any extra costs resulting from more stringent requirements
for dealing with whiplash claims. (Paragraph 30)
Claims for psychological damage
11. Once
proposals for independent medical panels for whiplash injuries
have been implemented and shown to work, the Government should
be prepared to extend their scope to other types of injury if
necessary. We also recommend that the Government press the Solicitors
Regulation Authority to stop some solicitors from playing the
system to maximise their income from unnecessary medical reports.
(Paragraph 33)
Policing
12. We
expect the insurance industry to continue funding the police Insurance
Fraud Enforcement Department in the long-term: we recommend that
the Government oversee IFED's funding arrangements to make sure
that the unit has a long-term future. (Paragraph 35)
Data sharing
13. We
are pleased to note that better data sharing to tackle motor insurance
fraud is now beginning. We share the Government's wish to see
results as soon as possible, but it will also be important to
get the details of the scheme right. In particular, data sharing
should be compulsory: otherwise, only the most reputable firms
will take part and the impact on fraud will be limited. (Paragraph
36)
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