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Ministry of Justice continues war against compensation culture

Ministry of Justice

Over the last few months, the Ministry of Justice (MoJ) has announced numerous plans and measures which aim to tackle whiplash fraud and reduce the 'compensation culture' that is rife within the UK. Back in November, the MoJ announced the creation of accredited doctor panels put in place with the sole purpose of vetting whiplash claims to ensure a claimant isn't overstating the extent of their injuries. The MoJ have now announced that courts will have the powers to throw out any claims which they feel are exaggerated, disingenuous or dishonest.

Tackling insurance fraud is one of the MoJ's main priorities, and it has been stated that drivers' insurance premiums have been rising steadily as a direct result of exaggerated claims. The MoJ presented figures from the Association of British Insurers which showed that in 2013, dishonest motor claims rose to a record 59,900 (+34%), totalling £811 million in fraudulent compensation. Further figures showed that fraud in the insurance industry was currently totalling around £1.3bn a year, adding an additional £50 a year to every household's premiums.

Throwing out dishonest whiplash claims

While accredited doctor panels were the first step in tackling whiplash fraud, UK courts will be able to throw out compensation claims (in full) where they believe the claimant has been "fundamentally dishonest"; while the new rules are originally targeted at whiplash claims, claims for accidents at work or trips and falls in public places will also be subject to increased scrutiny.

These new rules were recently enforced in the Gosling v Screwfix and anor case which we reported on at the end of May. Although the case was not fully thrown out, the Judge ruled that the claimant had been "fundamentally dishonest" and cut the value of his claim in half.

Along with these new regulations, the Ministry of Justice will implement new rules which will prevent lawyers from being able to settle personal injury claims without confirmation of a claimant's injury, meaning that lawyers will now be required to provide documents authorised by doctors, showing the claimant's injury and evaluating its severity.

Crackdown on incentives also announced

As well as new rules for the courtroom, the MoJ also announced a ban on unethical incentives offered by unscrupulous personal injury firms that encourage people to make insurance claims. It is sadly not unheard of to see claims management firms offering free iPads to claimants who are successful, or offering an upfront cash advance if the guilty party admits fault. These unethical tactics are a blatant exploitation of vulnerable victims and we believe they have no place in the claims industry.

Otto Thoresen, Director General of Association of British Insurers, spoke about these new bans, saying:

"We applaud the decision to ban the distasteful advertising which offers cash or other inducements for personal injury claims. This only serves to reinforce to unscrupulous claimants that there is a compensation culture to exploit".

Chris Grayling, Justice Secretary, also added:

"The new measures are the latest stage of the government's delivery on the commitment to deal with high insurance costs made by the Prime Minister at an insurance summit in 2012".

The MoJ hope to see these new rules legislated before the end of the current Parliament in May 2015, with the doctor panels expected to come into force from October 2014.

Have you been involved in a road traffic accident, accident abroad or accident at work and suffered a personal injury? If so, please feel free to contact our team of experienced solicitors at Fonseca Law on 01495 303124, email us or pop into our offices based in Ebbw Vale.