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 191.

    An awful lot of naivety I must say. In response to Techie Jim, a huge number of claims settle out of Court. As a solicitor in the industry who has been for 4 years, I can count pretty much on two hands the number of the hundreds of claims that I have dealt with that have gone to Court. And there are cost mechanisms in place which reduces incurred costs.

  • rate this

    Comment number 190.

    To deleted@180: How would I know whether someone is not really injured unless they told me so???

    I don't know what you do for a living but for example if you owned a shoe shop you wouldn't tell a customer not to buy another pair of shoes because you can see that they're already wearing a pair!

  • rate this

    Comment number 189.

    There is a lot of quick cash to be made from whiplash claims and im not talking about the sufferers!

    This is the price paid for living in a greedy self-serving capitalistic society

  • rate this

    Comment number 188.

    Don't blame insurers. Blame greedy claimants, greedy solicitors and courts with no guts to call someone a liar. A court almost never supports the insurer so is on a hiding to nothing. It is cheaper to pay early than fight in court and lose so why fight it? Until people have an understanding of what actually happens at an insurer, don't pass the blame to them. Blame the greed of today for it.

  • rate this

    Comment number 187.

    you have to consider their customers who exaggerate their injuries in order to screw some money out of the system.

    It society's attitude that needs questioning in this and in other ways that people seek to screw the system for their own gain and the expense of honest premium or tax payers.

  • rate this

    Comment number 186.

    With head restraints on all modern cars,if set correctly no injury will occur say below 15mph.Can insurers not eliminate all these cases as routine.

  • rate this

    Comment number 185.

    10 years ago I was new to the UK, and was involved in a very minor crash when the bus I was in hit a car. I suffered a headache next day, and the local hospital put me in a neckbrace, just in case. I was astonished when one of the hospital staff gave me one of these ambulance-chasing brochures, but I got in touch, and ended up being given over £4000. For NO good reason.

  • rate this

    Comment number 184.

    I worked for an insurer for years. The compensation culture and the ease of which the courts side with the claimant means it is almost impossible to defend any claim for whiplash. People view insurance as a 'christmas club' where they feel they deserve something having paid for it for years. Until we follow Australia and make whiplash a non-claimable injury, nothing will change.

  • rate this

    Comment number 183.

    I thought headrests were supposed to deal with this? How can you get whiplash? Other injuries, from having your head thrown back quickly against a relatively hard object (the headrest), yes. But whiplash?


  • rate this

    Comment number 182.

    149.Mr Wonderful
    1 Hour ago
    There's a lack of will at the insurers, as they could assess all whiplash claims simply by requiring all claimants to attend an independent doctor for an assessment appointment...........
    Wrong again - guessing aren't you? Doctor the claimant sees = agreed expert chosen by solicitor, approved by Insurer. Whiplash has no visible symptoms, so V hard to disprove.

  • rate this

    Comment number 181.

    63. dumfriesbhoy
    The vast majority of Insurers have not made any profit in Motor Insurance for over 10 years!"

    Which is their own stupid fault - because they encourage ambulance chasing lawyers, and don't fight claims even when they're obviously bogus. These things probably seemed like good ideas at the time, but have come back to bite them, hard, because they made the compensation culture grow

  • rate this

    Comment number 180.

    @Mendy_Brendy - Have you ever told anyone to not claim because they aren't really injured? Just asking.

  • rate this

    Comment number 179.

    I find it hypocritical that the AA are making their stance over hire charges and everything, since if you have a non-fault accident with them, the first thing they do is put you through to their accident management firm 'Claimsfast' before you even register the claim with the policy underwriter! They're as bad as any other solicitor or accident management group

  • rate this

    Comment number 178.

    I was getting bombarded weekly by ambulance can claim for your accident, so one day i recieved a call whilst at work, i said ok to the guy i will make a claim, he got ecited, after ten minuted of taking my details he asked the nature of the accident ...NONE , i hadnt had one....moral being waste my time and i will waste yours ten fold. never heard back from them

  • rate this

    Comment number 177.

    Having spent the last 18 months following a minor shunt in which nobody was hurt being repeatedly bugged by cold callers wanting me to 'claim compensation for my whiplash', I would personally be quite in favour of the Transport Committee's recommendations being acted on.

  • rate this

    Comment number 176.

    Here's an idea: roll third-party insurance into the excessive tax that is paid on petrol & diesel. This would ensure that all drivers ARE insured to meet the legal requirement, save police time checking insurance, and force insurance companies to be more competive when bidding for our business when we want insurance to cover fire, theft or fully-comp as we prefer.

  • rate this

    Comment number 175.

    It's not just whiplash that is on the increase, there's also a massive increase in "cash for crash" incidents.

    Many motorists have installed video cameras to protect themselves, and you can see some of these incidents on Youtube.

  • rate this

    Comment number 174.

    Just now
    The only way to solve this completely would be to enfore a ban on Personal Injury Lawyers getting privately involved in any RTA.........

    You cant be serious! You suggest that no lawyer can ever help anyone - I hope you or your children are never injured in a road accident, needing a lifetime of care costs. You may regret removing all access to legal help from society.

  • rate this

    Comment number 173.

    The adverts on television are driving me insane. In fact, the marketing industry in general is sending me potty. Its everywhere you look. Can I get some compensation for that? Or can that entire industry just please go away? Nobody needs it and its an obsene waste of money to tell someone to buy something when people have their own brains. Off topic I know, but my mental health has suffered!

  • rate this

    Comment number 172.

    With hindsight Insurers shortsighted in paying out on claims if cheaper than contesting.

    In the R.O.I. it is reported that Insurers are fighting back by prosecuting for FRAUD when claims are clearly false or wildly exaggerated.

    The same should be done here to both claimants and supporters (Ambulance Chasers).


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