Britain eyes curbs on whiplash compensation

Reuters News
Posted: Dec 11, 2012 12:13 PM

LONDON (Reuters) - Britain wants to make it harder for people to seek compensation for whiplash injuries after a car crash, amid fears a rash of fraudulent claims has pushed up the cost of insurance.

Under the proposals, published Tuesday by the Ministry of Justice, whiplash victims would be scrutinized by independent medical panels to weed out bogus claims. Insurance companies would be allowed to challenge more cases in court.

The proposed measures from part of a drive to curb fraud which car insurers say costs them 1 billion pounds ($1.6 billion) a year, much of it passed on to consumers.

Whiplash claims alone add 90 pounds to the average car insurance premium, the Ministry of Justice said, adding the proposed change would eliminate "easy paydays" for fraudsters.

"We welcome the consultation into ways of controlling whiplash claims and curb the compensation culture which is arbitrarily inflating insurance premiums for motorists," said Chris Voller, claims director at the British arm of French insurer Axa.

Car insurers have paid out more in claims and expenses than they have taken in premiums every year since 1994, squeezed by a combination of rising personal injury claims and intense competition, according to the Association of British Insurers.

Whiplash is a form of neck injury caused by a sudden jolt that snaps the head backwards, often when a car is struck by another vehicle from the rear. Symptoms include persistent neck and back pain.

There were half a million whiplash claims last year, contributing to a 60 percent rise in personal injury claims related to road accidents since 2006, the Ministry of Justice said.

The government also plans to ban "no win, no fee" lawyers paying referral fees to those who supply them with accident victims' names, a practice that, insurers say, has encouraged spurious and exaggerated claims. ($1 = 0.6210 pound)

(Reporting by Myles Neligan; Editing by Dan Lalor)