Whiplash fraud reforms delayed due to coronavirus
Proposals from Ministry of Justice were set to save drivers £35 a year, but have been postponed due to COVID-19
The Ministry of Justice has postponed changes to laws that were designed to make it harder for fraudulent whiplash claims to be made against insurance companies. The move was set to save drivers £35 a year in reduced insurance premiums, but the coronavirus outbreak means they won't be introduced until August 2020, instead of the April date originally intended.
The changes, once introduced, will tackle insurance fraud in the UK through tougher measures on fraudulent whiplash claims. The will see new, fixed caps on claims introduced, while the practice of settling whiplash claims without medical evidence will be banned.
A written statement from the Secretary of State for Justice, Robert Buckland, said that "While the whiplash reform measures remain important, the government is committed to acting to ease the disruption and pressures caused by the Covid-19 outbreak where it can." Buckland added: "Now is not the time to press ahead with significant transformational change to the personal injury sector."
Previous proposals have included limiting the amount people can claim for minor whiplash injuries, with the average payout falling from £1,850 to £425.
Past estimates have suggested that whiplash claims - both fraudulent and legitimate - can add up to £90 to the average cost of insurance in the UK. The new measures are expected to save around £1 billion, which insurers have pledged to pass on to drivers.
The Bill also includes changes to the way the personal injury discount rate - a percentage rate used to adjust compensation based on how much a victim could earn by investing payouts - is calculated.
Justice Secretary David Gauke said: "The number of whiplash claims has been too high for too long, and is symptomatic of a wider compensation culture.
"We are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday and that money can be put back in the pockets of millions of law-abiding motorists."
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