The Lloyd’s Market Association (LMA) has welcomed the proposed package of measures outlined in the Ministry of Justice’s (MoJ) consultation document ‘Reforming the Soft Tissue Injury (Whiplash) Claims Process’.
The LMA supports the vast majority of proposed reforms, including removing general damages for pain, suffering and loss of amenity in low-value injury claims and increasing the small claims track limit to £5,000. The MoJ is also proposing to ban insurers from making settlement offers before a medical examination has been undertaken. The LMA would like to see pre-medical offers permitted in certain circumstances, such as where claims are presented more than six months after the accident. In such cases a medico-legal report offers no benefit, purely adding time and cost to the settlement process.
David Powell, LMA Non-Marine Manager, said: “At present it is extremely difficult for insurers to defend against unmeritorious soft-tissue claims. Diagnosis of soft-tissue injuries and any related pain and suffering is self-reported by claimants, often months after the accident. Doctors are incentivised to support the claimant and the resulting legal ‘evidence’ is almost impossible for insurers to challenge or disprove. A direct consequence is that costs for insurers have spiralled out of control, with claims now 50% higher than 10 years ago, despite a fall in accident frequency. Premiums will remain unnecessarily high unless we change the compensation system to remove incentives for middlemen and minimise abuses”.