The deadline for the public consultation on the proposed reforms for the whiplash claims process has ended with the government gaining the support of the Lloyd’s Market Association (LMA).
The LMA welcomed the proposed package of measures outlined in the 82-page consultation paper released by the Ministry of Justice in November. The document contained plans to scrap the right to compensation or at the very least, put a cap on the amount people can claim for minor whiplash injuries.
The trade body said it 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 proposing banning insurers from making settlement offers before a medical examination has been undertaken.
The LMA, however, would like to see pre-medical offers permitted in certain circumstances, such as where claims are presented more than six months after the accident.
David Powell, LMA non-marine manager, said it is “extremely difficult” for insurers at present 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,” he said. “Doctors are incentivised to support the claimant and the resulting legal ‘evidence’ is almost impossible for insurers to challenge or disprove.”
As a direct consequence, Powell said the 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,” he said.
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