AA comments on Chancellor’s whiplash reform statement

The AA has welcomed the Chancellor’s Autumn Statement commitment to clamp down further on fraudulent injury claims which are estimated to cost British drivers £2bn per year.

The Chancellor said that compensation for injury would no longer be in cash but in medical care, while more small claims will be able to go to the small claims court with an increase in the upper limit from £1,000 to £5,000.

Stephen Gaywood, the AA’s director of counter-fraud said that the AA had been lobbying for these changes for some years, having first suggested them in 2010 at a time when car premiums increased by over 40% in just one year.

“By giving successful personal injury claimants care such as physiotherapy, which compensation is supposed to pay for, those out to make a fast buck from an injury claim that may not have happened, will immediately be discouraged.  However, those who have genuinely suffered injury will get the treatment they need. 

“Recent research by the AA suggested that 11% of motorists saw nothing wrong in claiming for an injury following a collision caused by someone else, even if no injury was suffered.

“This new measure will help to stop such claims.”

Increasing the small claims court limit, Mr Gaywood suggests, will also help curb ‘ambulance chasing’ law firms who help clients claim for sums over £1,000 and who inflate claims costs by up to 80% through their fees and costs.

These, coupled with measures already introduced such as the Medco independent injury assessment portal, will at last start to dismantle Britain’s unenviable position as the ‘whiplash capital of Europe’.

However, Mr Gaywood cautions, claim firms have been finding ways around the existing legislation.  Saving £40 to £50 on the average cost of a car insurance policy is a worthwhile aim but there remains still much to be done to curb other forms of insurance fraud – such as ‘ghost broking’ and making false, fraudulent, statements when applying for insurance cover.

“What’s more, car insurance costs are rising in part, thanks to the Chancellor bad timing in increasing Insurance Premium Tax (from 1st November) from 6% to 9.5%, which adds around £20 per policy.”

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