In his 2015 autumn statement George Osborne, Chancellor of the Exchequer, proposed the removal of ‘general damages’ for minor whiplash injuries, claiming the change will reduce insurance premiums by as much as £50 per policy.
Instead of being awarded cash compensation for the injury, pain and suffering caused, victims will make a claim based on financial loss due to the cost of medical treatment or any loss of earnings they have incurred, with the aim to make it “harder for people to claim compensation for exaggerated or fraudulent whiplash claims.”
The Chancellor says that this reform, which is proposed to take effect in April 2017, will save the motor insurance industry up to £1 billion, a sum to be reflected by a drop in insurance premiums. However, the overall cost to motorists isn’t the underlying rationale for the reform, with the focus instead on reducing the incidence and cost of fraud despite recent research that less than 1% of motor claims are fraudulent.
The planned change could leave many at a major disadvantage despite its monetary benefits, as it fails to take into account the income or physical state of sufferers. Whiplash injuries may occur as a result of the individual’s physique, the position that they were sat in at the time of the incident or even their age.
The elderly, children and those with pre-existing medical conditions are therefore more likely to suffer from an injury and, under the proposed reforms, be left disadvantaged with no access to compensation for the pain and suffering that they are subject to.
The planned changes will also disadvantage individuals based on their income as only some victims will be entitled to claim for the costs of medical treatment or loss of earnings. The retired and the unemployed will not be able to pursue these claims as most receive their medical treatment free on the NHS. The proposal fails to consider the addition of travel costs and the inconvenience caused to such sufferers, making it meaningless for the majority of whiplash victims.
The Ministry of Justice justify the changes based on 2011 data from the ABI which suggests that 7% of motor insurance claims are fraudulent stating: “the overall costs of these claims far outweigh the value to genuine claimants of relatively small amounts of compensation.”
However this data fails to take into account 2013 reforms to the Civil Justice System and the number of claims that actually occur compared to the amount that are reported to the police.
In a statement made by Cloisters just last month they concluded: “Many members of the public may think that the appropriate basis upon which to deal with fraudulent claims is to have such allegations proven at court, for the perpetrators of fraud to be penalised appropriately and for those wrongly accused to be entitled to compensation, without depriving those who have genuinely suffered injury of their right to make a claim.” You can read their full column here.
Beecham Peacock Solicitors in Newcastle can advise on all personal injury claims including whiplash. Call us on 0191 232 3048 or email enquiries@beechampeacock.co.uk.
