Embargoed to 0001 Thursday, August 25 File photo dated 22/8/2014 of motorists start to queue in heavy traffic on the M25 between junction 12 and 13 near Egham, Surrey. Millions of Britons are set to go on holiday over the bank holiday weekend, tourism bosses have said.

The UK insurance industry’s reputation has been damaged by recent newspaper articles accusing it of “cheating motorists” by not passing on so-called ‘whiplash claims’ savings. A recent report in The Times newspaper suggested that “insurance companies are overcharging motorists for cover despite measures implemented by our government in April 2013 that have helped the industry to save half a billion pounds in the past three years.”

The report goes on to say; “Premiums have jumped by as much as a fifth in the past 12 months alone – adding about £115 to bills – even though a government crackdown on the no-win, no-fee industry has led to a drop in whiplash claims.”

According to reports, the Association of British Insurers (ABI) figures indicated the number of motor-related personal injury claims fell from 365,000 in 2013, to 342,000 both in 2014 and last year, while the average cost of the claims, including damages and legal fees, has fallen from a high of £11,365 three years ago to £10,738 in 2014 and £10,614 last year.

“It suggests that the overall cost to the insurance industry of these claims has dropped from more than £4.1bn in 2013 to £3.6bn last year. Motor insurance prices, however, have actually risen over the past 12 months.”

Pressure is now mounting at Westminster for insurers to explain why, after being granted an overhaul of the rules relating to whiplash claims, the huge savings are not reflected in reduced premiums for UK drivers.

Louise Ellman, chairwoman of the Commons Transport Select Committee, said of the situation: “The bottom line is that the insurance industry promised that they would reduce premiums as whiplash claims fell and, if they haven’t done it, they’ve reneged on their promise. Fraud must be wiped out but the insurance industry must also honour its promises.”

Philip Holt, head of SRB’s clinical negligence department, commented that; “It will be interesting to see how the government acts on this information, which has in fact previously been made available to the government for a quite some time by organisations such as the Law Society and the Association of Personal Injury Lawyers. Particularly in light of further proposed cuts and changes, which include further fixed fees for lawyers pursuing cases on behalf of injured clients, a proposal to raise the small claims court limit, which is an attempt by the insurance industry to remove lawyers from the equation altogether, and an equally unjust proposal to abolish damages for cervical soft tissue injuries (‘whiplash’) claims altogether”.

The Law Society has issued a statement that robustly opposes plans to remove the right to recover general damages for soft-tissue injuries.

Speaking at the Association of Personal Injury Lawyers’ annual conference, Law Society chief executive Catherine Dixon told delegates:

‘The current environment for making personal injury claims is becoming more hostile. The pace of change in the personal injury litigation landscape is fast and unrelenting and changes seem to lack substantial evidence in support.’

She said: ‘We are concerned that the proposed changes may have the effect of hampering access to justice for those seeking to claim compensation for injuries they have suffered through no fault of their own.

‘The Law Society strongly opposes plans to remove the right to recover general damages for minor soft-tissue injuries. We are gravely concerned about how minor soft-tissue injuries will be defined and it is simply wrong, in our view, that people who suffer what could be injuries that impact on their lives through no fault of their own, are unable to recover compensation.

‘The government seemingly believes that plans to raise the small-claims limit for personal injury claims to £5000 and abandon general damages for “minor” whiplash injuries will help stop fraudulent claims. We disagree. It is critical that fraud is tackled but stopping people making legitimate claims is not the answer. It is important to be clear, there is a difference between fraudulent claims and what the government is referring to as unnecessary claims, which it believes are being brought for inconsequential injuries.’

Catherine Dixon highlighted that: ‘Claims for soft-tissue injuries are not considered unnecessary by those who are harmed through no fault of their own. There is a danger to justice if government fails to differentiate between fraudulent, “unnecessary” and legitimate claims. If a claim lacks merit it should be defended. Insurers should not pay out on claims which are either fraudulent or indeed on claims which lack legal merit.’

She added: ‘The myths fuelling the perception of a compensation culture are not based on fact and must be tackled. The Young Report, commissioned by prime minister David Cameron, stated that, while there was a perception of a compensation culture, this was not in fact the reality. If the government is looking to tackle fraud, then raising of the small claims and the removal of the right to general damages for minor soft-tissue claims is the wrong approach.’

She concluded: ‘The Law Society await the detail of the government’s proposals and we will be responding to the consultation robustly.’

For more information please call our personal injury team on 020 8891 6141, and they will be able to discuss the best action to ensure you receive the justice and treatment you deserve.