Appointing a Solicitor
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Government Plans to cut compensation for whiplash.
The average payout for whiplash compensation is £1850 this is set to fall by as much as £1500, following consultation.
The reduction is separate to medical cost compensation and loss of income.
The concerns come following the increase in cost to the insurance industry and, despite the fall in accidents, claims have increased.
The justice secretary Liz Truss highlights the impact the compensation culture has had on the insurance industry, sighting those claimants looking for an 'easy payday'.
Other proposals under consideration are
- A tariff for more significant injuries
- Increasing the level for which small claims courts can process (increasing the level to £5000 from its present level of £1000.
- Statutory medical reports before payment of compensation
The insurance industry have welcomed the move and promised to pass the saving on via reduced insurance premiums.
My own concern is why are insurance companies paying out on cases they know are 100% spurious, if compensation is due then it should be paid, if not, then we have legislation in place to crack down on fraudulent claims.
Any changes to the existing system will require an act of parliament, so whilst the headlines do speak about the end of the 'compensation culture' we must wait to see the detail. It is important that the reforms do not disadvantage motorists with genuine claims, the insurance industry are, of course, in favour of any reduction as they stand to save on both payouts (already paid for by the motorist through increased premiums) and savings on reduced admin costs (no doubt also paid for by the motorist), so if 100% of savings are not passed on to the motorist then expect insurance companies profits to increase.
If the proposals stop nuisance calls from claims management companies then I think we will all be happy!
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