The Prime Minister has signalled his intention to lead a Government clampdown on fake whiplash claims in a bid to reduce the price of car insurance.
David Cameron's intervention follows a damning report by the Transport Select Committee last month.
It found that bogus injury claims were the most significant factor behind huge recent hikes in the cost of motor insurance premiums.
On Tuesday, Downing Street hosted a summit between Cameron and leading insurers, aimed at reaching agreement on how to tackle Britain’s compensation culture.
Tougher stance
The PM told industry bosses that ministers were considering a number of options. These included:
- A tougher stance on whiplash claims, with a greater onus on victims to prove they had been seriously injured.
- A minimum speed limit for whiplash claims, so that individuals can’t sue following low-speed shunts.
- A cut in the minimum fee that solicitors can earn for low-value personal injury claims to reduce the overall cost of claims.
The Government said that false claims added around £90 a year to the typical car insurance premium, and cost consumers an annual total of £2 billion.
"I am determined to tackle this damaging compensation culture which has been pushing up premiums," Cameron said.
"I want to stop trivial claims, free up businesses from the stranglehold of health and safety red tape and look at ways we can bring costs down."
Soaring costs
The average price of an annual comprehensive car insurance policy today stands at £844, a rise of more than two-thirds in the past two years, according to the Confused.com/Towers Watson Car Insurance Price Index.
The Transport Select Committee found that there had been a 70 per cent rise in injury claims since 2005 despite a 23 per cent drop in the number of road accident casualties.
Nick Starling from the Association of British Insurers (ABI) last month said insurers have a hard time disproving whiplash.
"The problem is that if someone presents themselves with a medical certificate saying they’ve got whiplash, an insurance company would have to prove that they didn’t, and that’s an extremely difficult thing to do."
Better deal for motorists
ABI director general Otto Thoresen said the summit was "a unique opportunity to highlight to the Prime Minister the unacceptable cost pressures that insurers are facing, and what needs to be done to ensure that the UK’s honest motorists get a better deal."
Thoresen added: "We welcome the personal interest of the Prime Minster in this and the government’s willingness to consider radical reforms which will be necessary to tackle the UK’s compensation culture."
But one firm of personal injury lawyers said that genuine accident victims would lose out.
John Spencer, director of Spencers Solicitors, said: "It's not hard to see that the Government's current approach is at best one-sided and at worst potentially devastating to the individuals the entire system is designed to protect: the legitimate victims of accidents.
"Cutting claims may be good business for insurers, but it's most certainly not good for people injured in accidents."
