MPs have called for a reduction in the limitation period for road accident claims and more supporting evidence from whiplash claimants.
Publishing its fourth report of session into the cost of Motor Insurance, the House of Commons Transport Select Committee said genuine claimants should not be demonised, with Chair Louise Ellman MP, confirming that whiplash injuries can have debilitating consequences for those who suffer them. “However, some of the increase in whiplash claims will have been due to fraud or exaggeration,” she added.
“To help bring insurance premiums down the Government must tighten up the requirements for motor insurance claims and ensure that insurers honour their commitment to reduce premiums,” she said.
Proof of medical
“The Government should consider requiring claimants to provide proof that they have either been seen by a doctor or attended A&E shortly after the accident. There should be a presumption against accepting claims where adequate proof of injury is not provided.”
The Committee said it was “surprised” to hear that insurers will sometimes make an offer to personal injury claimants even before a medical report has been received. The MPs also noted that their previous recommendation on making the links between insurers and other parties involved with claims more transparent has been ignored. “Insurers must immediately get their house in order and end practices which encourage fraud and exaggeration,” the report warned.
Ellman added: “Motor insurers have committed to passing any reductions in costs arising from legal reforms to consumers in the form of lower premiums. We recommend that the Government explain how it will monitor that this commitment is honoured.”
The impact of fraud
The number of fraudulent and exaggerated whiplash claims has contributed to the increase in motor insurance premiums in recent years. However, the TSC said the absence of comprehensive statistics about road traffic accidents means that it is “impossible to relate the increasing number of personal injury claims in recent years to the number of accidents”. The Government needs to look at how to improve the collection of data about road accidents, according to the MPs, so that it can improve the detection of fraudulent personal injury claims and help highways authorities improve road safety by targeting spending on accident black-spots.
“The Government has claimed that the UK is the ‘whiplash capital of the world’, but without reliable data on road accidents we cannot say whether that statement is true or not,” added Ellman.
The Committee supports the proposal for an accreditation scheme for medical practitioners who provide medical reports in relation to whiplash claims. It is essential that the practitioners instructed to prepare such reports are provided with information about the accident and the claimant’s medical records. Reports prepared without this information are likely to be of very limited value.
“We were concerned to hear suggestions from insurers that medical reports routinely overstate the likely duration of whiplash symptoms. If true, this is evidence of systemic exaggeration of claims. A random audit of medical reports should be conducted each year to identify poor practice and improve standards.”
Dr Simon Margolis, CEO of Premex Group, the UK’s largest provider of independent medical reports for personal injury cases, welcomed the report, saying that it contains a number of ideas which would make the medical reporting process more robust to the benefit of claimants and defendants alike.
“This latest report demonstrates that the TSC has clearly considered a wide range of facts and opinions provided by ourselves and other parties that gave evidence. The process has moved on substantially from its beginnings and we applaud the efforts of MPs to make sensible recommendations that would improve the delivery of medical evidence in personal injury cases.”
Dr Margolis added that recommendations such as auditing of medical reports and accreditation of medical experts within a unified code of practice were worth considering. “Any proposal which encourages best practice by medical experts will win our support. Similarly, proposals which encourage the proper sharing of information would be of substantial benefit. We agree that more information about the accident along with assessment of the claimant’s medical records where appropriate would further validate medical evidence and support the equitable settlement of personal injury claims.”
Small claims limit
The MPs warned that access to justice could be impaired by Government proposals to switch whiplash claims between £1,000 and £5,000 to the small claims court, particularly for people who do not feel confident to represent themselves against insurers who will use legal professionals to contest claims. It said the use of the small claims track could also prove counter productive in efforts to discourage fraudulent and exaggerated claims as expert evidence is not generally submitted.
However, one commentator was less happy with this idea. Simon Douglas, director of AA Insurance commented: “Although the Transport Committee is cautious about increasing the small claims limit from £1,000 to £5,000, which is being considered by the Justice Ministry, we believe that this will prove to be a significant disincentive for those without a legitimate injury ‘chancing their luck’ at winning a settlement.”
The TSC believes that the Ministry of Justice should consider ways in which use of the small claims track could be combined with the routine submission of expert evidence, such as medical reports, to restrict opportunities for fraud and exaggeration. It should also consider ways in which litigants in person could be assisted to use the small claims process, to address the inequality of arms likely to arise in personal injury claims.
“Many claims are genuine and relate to real injuries which can affect people for months or years,” said Ellman. “In the debate about how to reduce fraud and exaggeration, genuine claimants should not be demonised simply because their condition cannot be picked up on a scan.”
The TSC report also pointed out that there are many factors which contribute to the cost of motor insurance including the activities of claims management companies, the poor safety record of young drivers and competition issues now under investigation by the Competition Commission. The report reiterates the Committee’s previous recommendation for more effective cross-departmental co-ordination of work to reduce premiums.