Brexit may put the brakes on whiplash claims clampdown

INSURERS fear that Brexit could derail a crackdown on the whiplash claims that have plagued the industry.

Last year, the Government vowed to curb cash payouts for whiplash claims. But Direct Line boss Paul Geddes told City investors last week that a ban on such payouts could be put back given the workload of Government lawyers and George Osborne’s departure as Chancellor.

‘We continue to lobby that it should happen,’ he said, but added: ‘Clearly there are many priorities of Government and the change of administration has meant some of the original sponsors of the legislation have changed. We’ve never dressed it up to be the easiest piece of reform because there’s a lot of law that needs to be changed and lawyers are busy on other things.’

Under the plan unveiled in the last Autumn Statement, injured people would still be compensated for costs such as medical care and lost earnings, but ‘general damages’ – cash payments on top of that for pain and suffering – would end. The Association of British Insurers last month urged the Ministry of Justice to produce a consultation paper on the proposed changes.

It estimates that whiplash claims cost the industry £2billion a year, adding £90 a year to motor insurance premiums.

James Dalton, its head of general insurance policy, said then: ‘The Ministry seems to be rowing back from much needed reform to the civil justice system that will save motorists up to £50 a year on average.’

It has been estimated that removing the right to cash compensation for minor whiplash injuries would save insurers enough money to cut average premiums by that amount.

The Ministry of Justice said: ‘The number and cost of whiplash claims remains too high, increasing premiums for ordinary motorists.

We remain committed to tackling this issue, and will set out our plans shortly.’

Britain has the highest rate of whiplash injury from car accident with a total of 750,000 claims last year.

In the UK 80 per cent of injury claims are for whiplash compared to 30 per cent in France.