Whiplash claims boom

updated September 17 2015

The report suggests that large numbers of motorists and passengers are exaggerating the extent of their injuries

Markus Moellenberg/Corbis

Almost a third of road accidents result in a claim for a whiplash-style injury amid warnings of aggressive new tactics being used by “ambulance chasing” legal firms.

A report by the Institute and Faculty of Actuaries found that 30 per cent of all shunts and crashes led to a personal injury claim last year. In Liverpool more than half of accidents – 55 per cent – resulted in demands for compensation, more than any other city.

Overall, the rate of personal injury claims increased by 1.5 per cent even though the number of crashes causing damage to cars and other vehicles barely changed. It suggests that large numbers of motorists and passengers are exaggerating the extent of their injuries to claim compensation. Whiplash can be notoriously difficult to disprove.

Two years ago the government attempted to restrict the number of rogue no-win, no-fee companies by banning referral fees used to encourage claims and cutting the size of third-party legal costs. Experts suggested that the reforms had failed to work, with companies using alternative tactics such as hiring marketing firms to drive up the number of claims.

The latest study, which analysed data from 18 of the top 20 motor insurers, found that the turnover of claim management companies actually rose by 30 per cent in the year to March 2015, to a total of £310 million.

The institute said that the figures appeared to cement the UK’s position as the “whiplash capital of the world”.

David Brown, one of the authors of the report, said motorists living in cities such as Liverpool could expect to see a sharp increase in the cost of insurance to compensate for the spike in injury claims. “It appears that the legislation implemented so far has failed to be hard hitting,” he added.

The government is due to launch a further review of claims management companies early next year.

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