The Association of British Insurers has hit back at MPs on the transport select committee for demanding a complete ban on pre-medical offers by insurance companies in whiplash cases.
James Dalton, head of motor insurance at the ABI, said: “Removing an insurer’s ability to settle a claim without a medical report will only serve to increase insurers’ claims costs, and consequently premiums.”
Mr Dalton said medical reports for minor injury claims produced years after a car accident added “no value whatsoever”.
He called on the government to press ahead with creating a nationwide panel of independent medical experts for whiplash cases, increasing the small claims limit to £5,000 and considering “whether general damages should be awarded for whiplash injuries at all”.
In an interview with Radio Four’s “You and Yours”, Mr Dalton added that he thought that the three-year limitation period for bringing whiplash cases was too long and claims should be notified sooner.
The transport committee’s fourth report on the cost of motor insurance , published last week, called on the government to put pressure on the Solicitors Regulation Authority to stop personal injury lawyers “playing the system” by commissioning unnecessary medical reports on psychological injuries.
In response, a spokesperson for the SRA said the regulator was considering the report “very carefully” and its board would be “deciding on next steps in due course.”
However, MPs also strongly criticised insurance companies for paying whiplash claims they suspected were fraudulent without asking for medical reports.
Craig Budsworth, chairman of the Motor Accident Solicitors Society (MASS), described the report as a “sensible blueprint for tackling fraud” and said the society it was working with the Ministry of Justice and insurance industry on the introduction of medical panels and data-sharing to combat fraud.
He said MASS had “long campaigned for a ‘no medical report, no damages’ approach” to whiplash. He said MASS did not support reducing the time limit for bringing forward whiplash claims, as some cases could be “extremely complex”, needing prolonged medical treatment.
He added that MASS agreed with the select committee’s caution on “hasty legislation” over the issue of “fundamental dishonesty”.
The government inserted a clause into the Criminal Justice and Courts Bill at the last minute, requiring courts to dismiss personal injury claims in their entirety where claimants have been “fundamentally dishonest”. During the bill’s second reading last week, peers were divided on the issue.
John Spencer, president of the Association of Personal Injury Lawyers (APIL), said that despite the fact “fundamental dishonesty” was a complex area of law, the amendment was introduced at such a late stage it had no scrutiny at all in the Commons.
“Blanket dismissal of such cases will have damaging consequences for injured people with legitimate claims for compensation,” Mr Spencer said. “While the definition of ‘fundamental dishonesty’ remains unclear, injured people may find themselves spuriously accused of fraud by unscrupulous insurers.”