Proportionate Compensation for Minor Injuries; Savings for Honest Motorists – ABI Backs Government’s Whiplash Reforms

LONDON, Jan. 10 -- The Association of British Insurers issued the following news release:

The Association of British Insurers (ABI) is backing Government plans for a more proportionate approach to dealing with minor whiplash-related personal injury claims to help reduce insurance premiums for honest motorists and tackle the compensation culture. In its submission to the Government consultation on implementing measures to end cash compensation for minor whiplash injuries and increase the Small Claims Limit, the ABI backs further reforms which, if introduced as a package, will help reduce pressures on the cost of motor insurance.

Despite a number of Government reforms in recent years, which led to insurers passing on savings of GBP1.2 billion to customers in lower premiums, the activities of claims management companies and ambulance-chasing lawyers have meant that the compensation culture continues to thrive. This is evidenced by the rise in soft-tissue neck and back injuries registered with the Government's Compensation Recovery Unit, and the high number of nuisance calls made by claims management companies.

The ABI's submission:

* Backs the Government's proposals to limit compensation for minor soft tissue injuries, such as whiplash, neck and shoulder pain, to loss of earnings, medical costs and rehabilitation care.

* Calls for minor soft tissue injury to be defined as injuries where major symptoms last for 6 months or less.

* Supports raising the Small Claims Track Limit for road traffic accident claims from GBP1,000 to GBP5,000. This will limit legal costs in settling lower value claims. Initially this should apply to road traffic accident claims, being extended to all personal injury claims at a later date.

* To safeguard the interests of claimants there should be an easy, accessible and consumer-friendly process developed.

* Strongly supports the introduction of a tariff of fixed compensation payments for soft tissue injury claims. This would ensure a clear, transparent system is in place to compensate those with a soft tissue injury.

Rob Cummings, the ABI's Head of Motor and Liability, said:

"Motorists and the industry have long called for action to tackle the compensation culture, so we support the Government's proposals. These measures are needed so that compensation for minor injuries is not at a level that encourages a compensation culture to thrive.

"Limiting compensation for minor injuries and increasing the small claims limit should balance the interests of those claiming with those of the far greater number of insurance-paying motorists.

"For these reforms to deliver on the Government's aim of helping reduce pressure on motor premiums, they must be implemented as a package and in full. The Government also needs to reconsider its plans to review the discount rate - the method used to assess higher value personal injury awards - as its flawed methodology and any reduction in the rate could wipe out any savings from these reforms."

[Category: Insurance]

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