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Whiplash Review Leads to More False Promises

View profile for Michael Pace
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Here we go again! Another false promise by the insurance industry to reduce motor premiums if the government either bans whiplash claims or raises the small claims limit, thereby stopping them having to contribute to the injured person's legal fees.

Eight years ago, the insurance industry led by Aviva and Axa persuaded the government that the claims system was wrong and that motor premiums could be reduced by £90 a year if the amount of legal fees which solicitors receive was reduced in a successful claim on behalf of an injured person.

As a result what are known as fixed fees were introduced in 2010. This fixed the amount to be paid to solicitors for any claim worth less than £10,000.

In 2013 the insurers made a further statement to government to saying that if solicitors’ costs were reduced again, then motor premiums would fall by £50 per year. A secret meeting was held at 10 Downing Street, hosted by David Cameron. The outcome was that laws were passed reducing the amount a solicitor gets paid for any whiplash claim to £500.

Well here we go again! Apparently if the government allows the insurers’ suggestion to become law, premiums will fall by £40.

To see the insurers claim that despite there being fewer motor accidents, claims have risen by 50% is ludicrous. This is typical tabloid sensationalism.

The Department for Work and Pensions (DWP) records every compensation claim that is made. The information is supplied by the insurance industry. DWP statistics show that the number of claims being made is falling year on year. These are the government’s own statistics. 

The truth is that since all the changes, what we have actually seen is insurance industry profits increase. The cost of premiums has also increased while the only decrease has been in the amount a solicitor gets paid.

The really scary bit for injured people will come if the small claims limit is raised to £5,000, as people will not be able to recover their solicitor’s costs while the insurers will go on using solicitors and barristers to fight claims in court. This will leave injured people at the mercy of the aggressive insurers.

Anyone who has suffered a whiplash injury will know how debilitating it can be; often it involves time off work. Claims usually include loss of earnings, private physiotherapy and, where necessary, payment for care and assistance as well as recovery of any insurance excess. Injured people will not only be injured but out of pocket too, while the insurers will just get fatter off their increased profits.