Fraud v. Whiplash

For the moment George Osborne’s reforms for whiplash injuries have been set aside by the government; however, the discussion around potential legislative changes and the commitment to reduction of the number and costs of whiplash claims remains on the Ministry of Justice’s agenda.  Meanwhile, the debate between insurance companies and solicitors remain – is the issue actually fraudulent claims?  What about the rights of the injured victims?

The proposed reform removed the right to general damages (this is a head of damage referred to as a non-economic damage and provides compensation for injuries such as pain and suffering and emotional distress) for minor soft tissue claims and transferred any personal injury claims with a value of up to £5,000 in general damages to the small claims court.   The reasons behind this reform can be summarised as the nationwide requirement for the reduction in both fraudulent claims and motor insurance premiums.

If the issue truly is fraud, let’s take a brief look at the statistics surrounding the data that is available. The Association of Personal Injury Lawyers (APIL) notes that the fraudulent statistics are both inconsistent and incorrectly assessed.  When referring to the total fraud bill in 2015, the Insurance Fraud Task Force includes ‘detected’ fraud in their total of £1.3 million.  Compared with the statistics of the Association of British Insurers (ABI) in 2012 that note only 7% of motor claims were fraudulent.  APIL argues that when separating fraudulent claims and motor vehicle claims, not only is there a clear representation of lower proven fraud, but also that ‘detected’ fraud should be defined as what it is: unproven fraud.

In their news release dated October 13, 2016 ABI does not mention the issue of fraud and discusses at length the requirement for this reform to “tackle the excess of the compensation culture” and to save billions (£4 billion over the court of Parliament) in premiums.

APIL discusses the purpose of general damages is to compensate for the most ‘devastating aspect of any car crash’; the personal injury.  The damage to your car or the car itself can be replaced, whereas personal injury and the loss of enjoyment of life, no matter the size, leaves as lasting effect of the daily life of the victim.

This reform affects the victim on many levels.  From the issues of the compensation being a right for every injured individual, access to justice and the Rule of Law, to lack of representation in the courts the bottom line is that this reform could leave the already vulnerable person at risk.

We have attached various articles for your reference.  While the reform has been set aside, the issues are still relevant and as suggested in the law gazette, maybe this is the time for an independent look at the information and statistics and for the solicitors and insurers to come together to address fraudulent activities and to ensure the rights of victims remain enshrined in today’s common law.