Transport committee weighs in on dishonest motor insurance claims
House of Commons Transport Committee warns of the wider implications of requiring Courts to throw out compensation claims where the Claimant has been dishonest.
In May 2014, the Association of British Insurers announced there had been 59,900 ‘dishonest’ motor insurance claims in 2013, with a value of £811m, up by one third from 2012.
In June 2014, the Government announced measures to crackdown on motor insurance fraud. These measures include requiring courts to throw out compensation applications where there is evidence showing the claimant has been dishonest and banning lawyers from offering inducements, such as cash, to encourage people to make a claim. A further measure would prohibit insurers from offering to settle whiplash claims before the claimant has undergone a medical examination.
The Transport Committee report reviews Government plans to tackle fraudulent and exaggerated motor insurance claims, particularly for whiplash injuries. It also follows up previous recommendations on court procedure and medical panels.
Overall, the committee agrees with measures to prohibit lawyers offering inducements and require claimants to undergo a medical examination. However, it warns of the wider implications of requiring courts to throw out compensation applications where there is evidence showing the claimant has been dishonest. The committee also notes evidence of new forms of potentially dishonest practice, such as ordering additional medical reports on psychological harm arising from road traffic accidents, are emerging.
In addition, the committee recommends:
- The Government should oversee funding arrangements for the police Insurance Fraud Enforcement Department
- Data sharing between insurers and claimant solicitors should be compulsory
- The Government should press the Solicitors Regulation Authority to stop some solicitors from playing the system to maximise their income from ‘unnecessary’ medical reports
- The Government should act to ensure better data exists about fraudulent or exaggerated personal injury claims
- The Government should publish for consultation comprehensive proposals for how medical panels will work
- Medical reporting organisations should be prohibited from providing reports on whiplash and other soft tissue injuries for claims being pursued by solicitors belonging to the same business structure
- The government should explain how it will prevent small firms being ‘squeezed out’ by the introduction of independent medical reporting panels for whiplash and related injuries
- The government should also inform the committee of what work is underway or planned to develop adequate safeguards to protect claimants from adverse consequences of raising the threshold for using the small claims procedure for personal injury cases.
Medical panels for whiplash injury claims are expected to be implemented in October 2014.