Cut limitation period for whiplash claims to six months, say insurers

Lloyd’s: LMA calls for damages tariff

The limitation period for bringing whiplash claims should be slashed to six months, the Lloyd’s Market Association (LMA) has proposed.

As the rhetoric steps up with the transport select committee’s inquiry into whiplash, the LMA said its proposals would “reduce the number and cost of whiplash claims in the UK, particularly reducing the number of frivolous and fraudulent claims”.

As an alternative to cutting the three-year limitation period, the LMA said damages should be reduced for claims submitted more than six months after an accident.

In its submission to the select committee, it also called for a tariff of damages that courts can award to whiplash claimants, dependent on the severity of their condition. “The LMA noted that a similar system operates successfully in France, and agreed scales of damages have worked well in other areas of compensation in the UK,” it said.

The LMA supported the government’s proposals to raise the small claims limit for injury claims to £5,000 and a new medical reports process – it called for a change to the situation where “many of the medical agencies conducting assessments of whiplash claimants are owned by solicitors”.

There should also be “a new public debate on the appropriate level of damages for whiplash claims in the UK”, it said.

David Powell, the LMA’s underwriting manager, said: “A major difficulty is that the low barrier to success for whiplash claims, and the high cost of opposing them, often makes it uneconomic for defendants to mount a legal defence – even when claims are weak. “Whiplash is a highly subjective injury: the accepted legal evidence of causation and injury is entirely based on doctors describing symptoms reports by the claimant – potentially up to three years after the event. We believe the proposals outlined by the LMA would be sufficient to reduce the frequency and cost of low value motor claims in the next few years.”

According to the Association of British Insurers’ submission to the select committee, 78% of PI claims following road accidents in the UK are for whiplash, twice the average percentage of whiplash claims across Europe. It compares to 30% in France and Denmark, 31% in Spain, 35% in the Netherlands and 68% in Italy.

The ABI supported the government’s whiplash proposals, and also said there should be “a fair and transparent method for calculating compensation for minor whiplash injuries, which is set independently”.

Head of motor and liability James Dalton said: “Our proposals will ensure that genuine claimants receive access to justice at a proportionate cost, while driving out fraudulent and exaggerated whiplash claims that increase the cost of car insurance for honest motorists.”

Meanwhile, following its RTA fraud conference last week, the Motor Accident Solicitors Society has called for “an end to the ‘have a go’ culture that is endemic across British society and which has contributed to an increase in fraudulent motor accident claims”.

Chairman Craig Budsworth said: “The government must recognise that problems within the motor insurance industry are being replicated across many areas of society. The way to tackle this is not by introducing one-size-fits-all changes that will also prevent legitimate recompense for victims, but a more holistic approach that includes addressing wider social and cultural issues.

“People need to understand that making a fraudulent claim may, if undiscovered, bring short-term financial reward, but ultimately leads to increases in everyone’s insurance premium as the costs are passed on. Until the root cause is tackled, those who wish to ‘have a go’ will at least seek to do so.”

He urged insurers to play their part by stopping activities such as pre-medical offers and “other incentives that might encourage this behaviour”.



30 March 2021

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