MPs demand action on spiralling whiplash claims

Kathy Kiera Clarke as Una in BBC series Pulling Moves Whiplash claims should be supported by evidence of injury and inconvenience, the MPs say

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The cost of car insurance could be cut if the government restricted the huge number of subjective whiplash injury claims, a committee of MPs says.

The Transport Select Committee says claimants should provide much more proof that they have suffered a whiplash injury.

The MPs also want insurers to be banned from selling any customer information.

The government intends to ban them from receiving referral fees for this data, but only for personal injury claims.

Louise Ellman, chair of the Transport Committee, said: "Insurers, solicitors and claims management companies have themselves driven up the cost of motor premiums by encouraging people caught up in road accidents they did not cause to claim for personal injury, car hire, and other legal costs."

"The insurance industry must abandon sharp practices that push up premiums such as passing drivers' personal data to other parties or taking secretive referral fees from solicitors, garages and car hire firms," she added.

'Subjective and costly'

The committee pointed out that there has been a 70% rise in motor insurance injury claims in the past six years, despite a 23% drop in the number of casualties actually caused by road accidents.

Louise Ellman said that whiplash, in turn, accounted for 70% of all these injury claims - amounting to roughly 554,000 whiplash claims in 2010-11.

"Whiplash [is] an injury where diagnosis is often subjective and therefore very costly for insurers to challenge," she said.

"The threshold for receiving compensation in whiplash cases should be raised and, if the number of such claims does not fall significantly, the government should bring forward primary legislation to require objective evidence - both of a whiplash injury and of it having a significant effect on the claimant's life - before compensation is paid," she added.


The Association of British Insurers (ABI) agreed that the payment of referral fees should be banned, but to all organisations and not just to insurers.

Start Quote

The insurance company would have to prove that they don't have whiplash, and that's an extremely difficult thing to do”

End Quote Nick Starling Association of British Insurers

And it backed the call for action to restrict whiplash claims.

"It is absolutely critical that Britain's whiplash epidemic is tackled once and for all and the select committee's acknowledgment that the bar to receiving compensation for whiplash is too low is a step in the right direction," said Nick Starling of the ABI.

But he explained that currently it was very hard for insurers to resist claims for whiplash injuries.

"There is one whiplash claim every minute of every day in this country - the problem is that if someone presents themselves with a medical certificate saying they have got whiplash, the insurance company would have to prove that they don't have whiplash, and that's an extremely difficult thing to do."

'Dirty secret'

In the past year the insurance industry and its fast rising motor premiums have come under increasing scrutiny.

  • In March 2011, the Transport Select Committee accused the insurance industry of encouraging claims through the payment and acceptance of referral fees
  • In June, the former Justice Secretary, Jack Straw, described this system as a "dirty secret" and a "racket", in which insurers sell information about customers who have been involved in accidents to solicitors who then encouraged them to make claims
  • In September, the Office of Fair Trading (OFT) started looking at why motor premiums have been rising fast
  • That month the government agreed to change the law to ban referral fees in personal injury claims
  • In October, the Parliamentary Justice Committee of MPs said the payment of such fees encouraged organisations to sell data without permission, and said the impending ban should apply to all referral fees paid by lawyers to third parties
  • In December, the OFT launched a full investigation into car insurance costs, including the cost of accident repairs and replacement cars.

Jack Straw said the entire system of motor insurance, which is compulsory for drivers, was acting against the public interest.

"Because the profits to be made are so high - in terms of legal costs, the intermediaries like credit hire companies who hire out replacement cars, the accident management companies which decide what kind of paint the accident repairers will required to use, and many others in this chain - you get probably £2bn out of the £9.5bn in premium income being siphoned off by this process," he said.

Legal changes

The renewed emphasis by the Parliamentary transport committee on dealing with spurious whiplash claims was welcomed by the motoring organisation the AA.

"A claims culture has developed to the extent that it has become accepted that if another vehicle hits your car, you should make an injury claim," said Simon Douglas of AA Insurance.

Nick Starling from the Association of British Insurers and Dr Rosemary Leonard on whiplash

"That's regardless of how serious the injury is, or even if no injury has actually been suffered," he added.

The AA acknowledged that the steep rise in premiums recorded in the past few years had levelled off in the past nine months.

Currently, the Lords are scrutinising the Legal Aid, Sentencing and Punishment of Offenders Bill, which has been amended to put in place the ban on referral fees relating to personal injury cases.

"Once the Bill is enacted, we call on the government to... prohibit insurers from receiving referral fees across the board rather than only in relation to legal action," said the Transport Committee's report.

"We recommend that the government send a clear message to the insurance industry that it expects the data protection legislation to be fully respected and we echo the recommendation of the Justice Committee that the stricter penalties for breaching the [Data Protection] Act, passed by Parliament in 2008, should be brought into force," the MPs added.


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  • rate this

    Comment number 51.

    3 Minutes ago
    So I pursued a legitimate claim for personal injury, but I wouldn’t have bothered had I received the car’s true replacement value.
    Says it all really.

  • rate this

    Comment number 50.

    Husband claimed for whiplash. Other driver lied and said he'd reversed into her so the court case took two years. Her lying meant that he had a scan, saw a specialist, had an "independent report", had to fill in numerous forms, had 2 seperate visits to look at the car damage, and she finally admitted her lie just before the hearing. He got £300, but it was her lies that cost all the money.

  • rate this

    Comment number 49.

    Compensation culture in full swing. It is seen by so many as a free lottery ticket. You win and its easy money, lose and it costs you nothing. What I find incredible is that insurance companies have been passing on details of accidents for money and then complain about the number of claims.

  • rate this

    Comment number 48.

    The other way of looking at this is that the govt is attempting to make it harder to force the insurance companies to pay for genuine injuries. I note there's no mention of forcing down premiums in this article. Beyond getting a medical certificate saying you have whiplash how on earth is a genuine whiplash sufferer meant to claim for their injury?

  • rate this

    Comment number 47.

    7 Minutes ago
    the whole injury compensation in this country is getting out of control, I know a person who thrown himself down a manhole that wasn't sealed off to the public just just to get some compensation!

    Wasnt that Uncle Albert in Only Fools & Horses?

  • rate this

    Comment number 46.

    Change the cost base for sorting claims out. At present it has to go to court so it is cheaper to settle out of court.

    For low level claims there needs to be a lower cost mechanism to decide the merits of any case - keep expensive solicitors and court costs out of the loop. Some form of arbitration mechanism.

    No chance of people being hionest I am afraid.

  • rate this

    Comment number 45.

    It's known as "whipcash" where I live.

    (I don't live in a nice are.)

  • rate this

    Comment number 44.

    I always look after my car, so it’s in flawless condition compared with other cars of a similar age. On one occasion where my car was written off through no fault of my own, the money I got for it was much less than the cost of replacing it. So I pursued a legitimate claim for personal injury, but I wouldn’t have bothered had I received the car’s true replacement value.

  • rate this

    Comment number 43.

    Premiums were not cut when Solicitors were reduced to charging "Predictive Fees", Premiums where not cut when these fees were significantly reduced and a new, more cost-efficient, system was introdced for dealing with claims was introduced; and Premiums where not cut when the insurers started to sell the details of accident victims to firms of Solicitors.

  • rate this

    Comment number 42.

    Last week I had two calls within an hour from the same claims company referring to a minor accident I had in 2010. I told both callers I was not injured and would not be putting in a claim. The second caller asked "Why wouldn't you want to put a claim in anyway?"
    If this is the mentality of the companies dealing with injury claims, no wonder out insurance costs are going through the roof.

  • rate this

    Comment number 41.

    Its such a difficult problem. Injury claims are very valid where a person, through inadequate training, lack of supervision and poor worksite management is severely injured - think scaffolding poorly constructed by untrained workers and then colapsing under load injuring a few workmen and passersby

    However, this is also taken advantage of by "victims" who work the system for their own profit.

  • rate this

    Comment number 40.

    If your hit from behind and your head restraint and seat belt are correctly positioned and tight then you cannot get whiplash as your head is pushed back and would only travel a max of 6in.THAT IS WHAT THEY ARE THERE FOR. Maybe no payout should be given, and a bit of "whiplash" now and again is the price we pay to drive.

  • rate this

    Comment number 39.

    The only winners are the lawyers, who have been given a licence milk the rest of us. For all but the serious life changing injuries compensation would be far better according to an agreed fair strategy, and carried out by the loss adjusters who assess what should be paid when e.g. a house has suffered storm damage.

  • rate this

    Comment number 38.

    I suppose it would be too much to expect that bastion of high morals and ethics ,The Law Societry, might look at the antics of some of its members .

  • rate this

    Comment number 37.

    There is a whole industry around ins claims taking in whiplash , car hire , legal fees , loss of earnings etc. and has become organised crime to some . Most people I ever met who got a whiplash claim never had anything really wrong with them but its seen as easy money . There has to be a much tougher approach taken becaus all fair minded people suffer in their car premiums .

  • rate this

    Comment number 36.

    I have had to change my number due to the amount of texts and calls i was getting for a accident i wasnt in! I lodge with someone and he has two claims on the go at the same time, hes told me hes getting his own back! Its a load of rubbish, apparently he is allowed to monitor his own recovery what a load of rubbish

  • rate this

    Comment number 35.

    I suspect premiums won't come down a great deal, whiplash claims or no. All that will happen is that they will make more money and we will still be charged the same.

  • rate this

    Comment number 34.

    @ 9. Redwoodsteve
    “I then received a letter from a solicitor stating I'd pulled out into him and gave a long list of back and neck injuries he had. I denied any liability.”

    With respect, why should anyone believe what you say above the cyclist?

    Ideally, if you were at fault in this, you would have also been prosecuted and banned from driving.

  • rate this

    Comment number 33.

    Injury claims from vehicle accidents should be limited to nett loss of earnings. I know people that have claimed for injuries sustained in an accident even though they didn't need to take a day off work because of the 'so-called' injury.

  • rate this

    Comment number 32.

    This is a great example of why our political system is rotten to the core, regardless of the faces in power. It's run by big business, for big business. They never do anything to rein in abuse, if it might hurt fat cat profits.


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