Crackdown continues on whiplash larceny

Concocted or exaggerated claims for whiplash injury are a pain in the neck – and the wallet – for honest motorists. It’s we who end up paying the cost of ill-gotten compensation payments and needless medical bills through higher car insurance premiums.
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The insurance industry reckons whiplash costs a typical motorist £90 a year on their premium. Around £60 of that is thought to be unjustified. A whacking great £2 billion a year, all told.

Go figure

Some apologists for the current situation – mainly legal professionals who say they have the interests of motorists at heart – say insurers are crying wolf over whiplash to boost their profitability. But ponder this. There were 190,000-odd road accidents in 2006, and 150,000 in 2012 – a welcome fall of around of 22%. In the same period, the number of personal injury claims filed subsequent to a road accident increased from 520,000 to over 800,000 – a 60% increase. Cars are also getting safer – they’re built to protect the occupants in the event of a collision. So clearly, something dodgy is going on. In a recent survey by insurance firm Axa, one in 10 people admitted they had lodged a false claim, or knew someone who had tried to scam their insurer over whiplash.

Tricky diagnosis

It’s not particularly difficult, either. Whiplash is notoriously tricky to diagnose because there are no visible symptoms. It’s essentially injury to the soft tissue, so you might not suffer cuts or bruises. In other words, if you complain of neck ache, your doctor must either sign you off with whiplash or call you a liar. No wonder 73% of people agree that whiplash claims are easier to embellish than any other type of insurance claim.

Government action

The government is keen to tackle the problem and has recently introduced a series of measures in an attempt to curb our compensation culture.
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For example, it has imposed a ban on referral fees in personal injury claims, so details of accidents cannot be sold onto lawyers. It also wants future whiplash claims to be substantiated by accredited medical experts, with no commercial tie between experts and lawyers. Lawyers won’t be able to offer inducements (such as a laptop) to encourage people to claim, and those who produce medical reports can no longer offer treatment. Insurers and lawyers will be encouraged to share information in a bid to bring a serial fraudster’s past mis-deeds to light. And the whole caboodle will be scrutinised by an insurance claims fraud taskforce under David Hertzell, a big cheese from the Law Commission.

Definition of whiplash

But Axa is calling for further reforms – and it seems to have public backing.
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  Most people, for example, think you should only be able to claim if your neck ache is severe, which seems entirely reasonable. Axa therefore proposes a clear definition of whiplash in accordance with something called the Quebec Task Force Classification, which grades injuries in increasing order of severity from 1 to 4. Almost 93% of whiplash claims in the UK would be classed as grades 1 and 2, so Axa suggests that compensation should only apply to grade 3 and 4 injuries. The claims bill would consequently plummet.

Medical assessment

Many people also believe that medical assessment of whiplash should be more rigorous. Axa is strongly in favour of independent examiners in line with the government proposals for a panel of approved and disinterested specialists.

Time limit

The government seems less keen to introduce a time limit for whiplash claims, though limits operate in other countries such as Sweden – and appear to have widespread support. The current system in the UK gives people up to three years to make a whiplash claim, which many argue is too long and wide open to abuse. It’s perhaps no surprise that almost three quarters of the respondents in the Axa survey think the time limit should be cut to one year, while 43% judge one month to be long enough to sort out the paperwork. Aviva, another insurer, also suggests compensating minor whiplash with rehabilitation rather than cash to deter fraudsters.

Difficult to cure

All of which is fine and dandy, of course. Anything which confronts the scourge of fraud and helps reduce premiums for honest policyholders has to be embraced. But I’m far from optimistic. This sort of crime is akin to those fairground games where plastic frogs pop their heads out of holes in a table top and you have to bash them back in again with a hammer. Staunch the flow of ripped-off funds to low-life fraudsters from one particular source, and you can bet next year’s car insurance premium that they’ll create a fresh supply in double-quick time. Fraud of this nature will only be curtailed if and when insurers cease to seen by a hefty chunk of the populace as ‘fair game’ – that’s part of the brief to the Hertzell taskforce. We can only keep our fingers crossed.

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