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Crack down on whiplash cheats


Ministers and insurers want to cut down on fraudulent compensation claims, but what's actually being done?

Driver suffering from whiplash

In October 2014, ministers rolled out the latest stage of their work to reduce the cost and frequency of fraudulent whiplash claims.

Importantly, they promised to withhold all compensation payments from anyone found to have exaggerated or invented a personal injury claim following a road accident.

Ongoing battle

This means that cheats would not get a penny, even if they have suffered genuine injuries.

This part of the proposal is the latest step in an ongoing battle against the rising cost of personal injury compensation.

In 2014, the Association of British Insurers (ABI) reported that more than 1,500 whiplash claims were made every day, costing insurers £2 billion a year.

This additional cost adds an estimated £90 to the average annual car insurance premium.

The organisation said that insurers detected almost 60,000 bogus or exaggerated motor insurance claims in 2013.

Victims 'encouraged to overstate injuries'

man neckbrace

The ABI blamed lawyers and claims-management firms which encourage accident victims to overstate the nature of their injuries, in order to win more compensation.

The government clamped down on these practices by banning no-win no-fee solicitors from doubling their fees if they win, and banning referral fees.

They also imposed tougher new regulations for claims-management companies, which included banning them from offering cash incentives or gifts to claimants.

But the Ministry of Justice (MoJ) wanted courts to throw out any claim for compensation where the claimant is found to have been "fundamentally dishonest".

Former justice secretary Chris Grayling said: "Insurance premiums have fallen by record amounts over the past year as we have turned the tide on the compensation culture, but there is more to do.

No more cash inducements

"We are continuing to go after the fraudsters who force up costs for honest drivers."

Former ABI director general Otto Thoresen says: "These changes are a positive development for the vast majority of honest insurance customers who end up paying for the fraud of the minority.

"We applaud the decision to ban the distasteful advertising which offers cash or other inducements for personal injury claims. 

"This only serves to reinforce to unscrupulous claimants that there is a compensation culture to exploit."

Are new laws necessary?

driving law

"In the past there were no consequences for the fraudsters who exaggerated or invented injuries in order to claim compensation.

"This legislation fundamentally changes the game and will help put an end to the mentality whereby a claimant had nothing to lose by inflating a claim."

But motoring lawyer Jeanette Miller, believes that new laws may not be necessary.

"I think there is sufficient protection already in place," she says.

"Claims are dealt with on a case-by-case basis by judges and they already reduce awards if there is an element of exaggeration.

"I don't believe further intervention is needed and it will only feed the ‘all claimants are frauds’ ethos."

Fraudulent £650,000 claim

Insurer LV= said that the crackdown could have helped it avoid paying compensation to an accident victim who was subsequently jailed for lying about the extent of her injuries.

In 2005, accountant Minaxi Shah claimed more than £650,000 after being involved in an accident which she said left her unable to work and in need of up to eight hours care a day.

However, investigators found Shah and her family had lied about the seriousness of her injuries and she was jailed in 2011.

LV= claims director Martin Milliner says: "Ms Shah was still awarded compensation for her genuine injuries despite the fact the claim was grossly exaggerated."



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