The UK is the Whiplash capital of the world as the number of drivers claiming whiplash has increased by 50% in the last 10 years. In addition, the motor insurance providers assert to pay around £1 billion every year for the whiplash claims. This gigantic amount was paid for comparatively smaller injuries due to whiplash and many of them were fraud claims just to access money from the insurers.
The worst part is that honest car drivers have to pay higher premiums as the insurers would pass on the extra payments to their customers, which includes law abiding drivers with clear licensing history. However, the government and the ministry of Justice took strict action by capping whiplash claim payments to minimise them to a maximum level of £425. This was a huge and commendable step as the average payout was £1,850 and experts estimated that the cap would save each insurance holder somewhere around £40 a year.
Now that the final paper is expected to be published in April 2017, let us check the actual impact of the whiplash reforms. The law firm DAS has made some extensive research on the final outcomes of the whiplash reforms. Experts at DAS suggest that while the reforms have positive impact on the insurers it may not be the best thing for the people hit by accidents. They emphasized on the fact that while capping the whiplash claims works in the favour of the insurers and reduce fraud cases, the reduced compensation would affect a big number of people hit by accidents.
Let us glance through the consequences of whiplash reforms on the motorists:
The measure of increasing the small claims track limit would reduce claims!
Well, the measure to cap the whiplash payout was also clubbed with the suggestion that small courts should handle the personal injury claims worth £5,000. Previously, the small courts could handle claims worth anything up to £1,000. By increasing the limit the motorist would have to bear the costs of the court proceedings and other legalities. This would prevent the fraudsters from making false claims as they have to invest in the litigation process. Therefore, the step would reduce the number of wrong claims.
Collecting proofs would call for additional costs!
The measures also suggested that if the claim is disputed due to any reason then it would have to follow the small claims track process which demands the motorist to manage evidence of the accident, present witness if any, show police report or bring forth any technical proof. They have to actually pay the fees for the police report as well as the technical proofs and so, fraudsters would fall in their own trap. In addition, they have to pay the court fees which is somewhere around £205 and hearing fee up to £335. This kind of additional costs would prevent fraudsters from making whiplash claims.
Medical reports as proof of injury would add to the costs!
The report also suggests that the injured person would need to present the medical evidence of injury through diagnostics like MRI scans and X-rays in order to prove the injuries have actually occurred. This would add to the cost and people may need to buy legal expenses insurance, which is an additional burden. If the whiplash reforms are made mandatory then there would be higher demand of legal expenses insurance and motorists would be bound to buy it as a financial support for the claims.
Compensation culture would go through a shift!
The reforms received a positive response from almost all corners of the insurance sector with LV= General Insurance and Aviva saying that the reforms would save the honest customers from paying extra premiums, which go into paying the whiplash claims. Rob Townend, director at Aviva expressed his views by saying that “These proposals bring us a step closer to saying good riddance to the ‘whip-cash’ merry-go-round that is the bedrock of the UK’s compensation culture.”
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