Crackdown on ‘whiplash’ compensation culture 'may hit genuine victims in the pocket'

PLANNED changes to accident insurance claims could see genuine victims losing out, fears a leading Personal Injury Lawyer.

A surge in the UK’s so called ‘claim culture’ in the last decade has seen a number of reforms in this area of law, with more new measures due to be rolled out in an attempt to deter people from submitting claims for personal injury compensation.

As previously reported, there has been growing concern with people having ‘staged car accidents’, or exaggerating their injuries to claim compensation, leading to some receiving settlements from insurance companies as a result.

The proposed reforms are intended to reduce the amount that insurance companies will have to pay out, resulting in saving their shareholders money on the proviso that the savings will be used to reduce insurance premiums for motorists.

However, Steve Hennegan (pictured). a Partner within Wilkin Chapman’s Personal Injury Department said:

“There is increasing concern in the industry that the planned reforms could harm a genuinely injured person’s chance to receive the compensation they deserve.

“The impending reforms will leave the public having to deal with the insurance companies direct and remove access to the independent legal support and advice often needed to secure a fair settlement. These further proposed reforms follow significant reforms that have been in place since 2013. All of these have saved the insurance companies money, but we are still unsure as to whether these savings have been passed on to the public,” he added.

Changes have been anticipated since an announcement by the Government a year ago and dominated news headlines earlier this year, with details emerging following a Justice Committee hearing. The report that followed on from the outcome of the hearing details that more work is to be done before these reforms are finalised in a year’s time.

Under the initial proposals discussed at the hearing is the introduction of a new tariff to be applied to claims for soft-tissue claims, with a value of up to £5,000. The proposed tariff would provide significantly less compensation than at present, for example, a six-month injury currently attracts a potential award of approximately £1,750, where as under the new reforms the tariff proposed for the same period of suffering would provide an award of a mere £400 – a dramatic difference.

It is also widely thought that if these reforms are approved for road traffic accident claims, they may well be extended beyond that to cover all types of injury claims, including public liability accidents and injuries caused in the workplace.

Mr Hennegan added: “I am all for fraudulent or exaggerated claims being excluded, as there is no automatic right to compensation. Everyone must remember that compensation is never won, it is deserved. The rule of law behind personal injury claims is that of restorative justice with the aim being for the injured party, who has suffered injury and financial loss through no fault of their own, being put back in the position they would have been if the accident had not occurred.

“The vast majority of claims are not fraudulent and caution has to be exercised to protect those people who will often be genuinely in need and deserving of adequate compensation and rehabilitation,” he added.