24 April 2013Print This Post

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”.

By Neil Rose


3 Responses to “Cut limitation period for whiplash claims to six months, say insurers”

  1. common law should evolve to inrease access to justice not reduction by statutory intervention. This is a bit like the propsal to reduce time to appeal for JREVIEW to 6 weeks NO ORAL HEARING.

    Rreducing time will hampers access and should be resisted.

  2. abdul hafezi on April 24th, 2013 at 10:09 am
  3. Wow here comes the next onslaught. They won’t be happy until their shareholders retain 100% of the premiums!!! Do the insurers not have to justify exactly what benefit there is in an insurance policy. By law every car on the road has to be insured. if the intention is simply to pay repair costs then just say so and reduce the premium accordingly. Genuine people make genuine claims for genuine injuries. Defend those that are fraudulent to trial and lobby for the ability to increase those people’s premiums to a level so unaffordable that they can never drive again! Or simply lock them up for six months. How about taking action against the fraudsters instead of the entire nation!!

    Surely eventually the government will wake up???

  4. Matthew Waterfield Simply Lawyers on May 4th, 2013 at 9:57 am
  5. When will politicians stop legislating to cater for numerically insignificant, bogus reasons?
    The general time limit for PI claims is “general”, not general except this or that injury. What is one exception today becomes a list of dedicated, prescriptive periods spread over the wide horizon of ways humans have found to sustain damage.
    To the vast majority of medical practitioners, the symptoms of a neck-sprain injury onsets between the original insult and 24/36 hours. It is an acute injury. I have spent a few years away from PI practice but take it that “late-reported late onset whiplash injury” is a newish phenomenon, enabled by a caucus of like-minded medicos prepared to sell their souls and swear that just as usually-trivial neck sprains “accelerated” the onset of spondylitic symptoms by x years, then a symptomless neck injury will have accelerated the process also and hence the onset after, say, 2 years is related to the “injury” that didn’t reveal its symptoms.
    The logic of the causal link is faultless but it has always been completely specious to attribute any period of acceleration to the typical, as opposed to catastrophic, neck sprain the thousands of claimants suffer every year. In fear of upsetting many medical reporters and claimant practitioners, not to mention all the judges who have “split the difference” between 5 year accelerations and 6 month aggravations, cervical and lumbar spondylitis is due to dehydration in the discs. So called “wear and tear” is DNA-related. It isn’t wear, save that as the disc shrinks it deforms and this sets up the protective process of muscle spasm. Dehydration is not altered by a compression type insult. I would invite medics who disagree to explain the epidemiological basis for their belief! It is a well-understood situation. Just as it has been demonstrated by the series of cadaver-based tests, that a healthy disc does not prolapse under an acute load but that surrounding tissue fails first.
    To return to the proposal to proscribe neck sprain claims after a limitation period of 6 months doesn’t need legislation, it needs a medical profession that recognises reality and doesn’t say what it thinks those paying want to hear. Oh yes, and a few judges who handled proper PI work, not matrimonial cases, and who appreciate that the JSB Guidelines is an aid not a substitute for actually discussing with the leading medicos in their specialisms why the myths that are doled out daily in hack medical reports are myths.
    But then, as the judiciary at the lower end are unlikely to have had the exposure I write of, it is much simpler to let Parliament go on wrecking a system that worked whilst the Medical Fraternity exercised a degree of hard-nosed cynicism and didn’t cross their fingers whilst writing their reports and a judiciary who actually knew a bit more about the subject of their deliberations.
    Seeing that the Protocol effectively limits most claims to one Report, many practitioners and most judges aren’t even likely to be exposed to the medical opinion I rehearse in these few lines.
    “Give him the money, it’s only an Insurance Company and they can afford it”.

  6. Thomas Tidswell on June 26th, 2013 at 3:17 pm