'Crash for cash' scammers under pressure

SCAMMERS have been stopped in their tracks following an announcement that fees surrounding whiplash claims are to be capped.

From October, new rules will mean medical professionals can only charge £180 for an initial whiplash report. At present, as much as £700 is charged.

Around half a million whiplash claims take place each year and insurers estimate they add £90 a year to the average motor insurance policy.

The new measures follow Government reforms to the laws around "no win no fee" deals. Lawyers can no longer double their fees if they win, at the expense of defendants and their insurers. "Referral fees" paid between lawyers, insurers, claims firms and others for profitable claims have also been banned.

The Government said the new measures come as further changes to "tackle the compensation culture" are progressing through Parliament in the Criminal Justice and Courts Bill.

Offering incentives to potential claimants will be banned, and the courts will be able to dismiss any case where a claimant or their lawyer has been fundamentally dishonest.

Medical experts who produce reports on the 'injured' claimant will be banned from also offering treatment, to remove the incentive to over-treat in order to inflate claim values.

In the past insurers have settled claims without evidence in order to deal with them quickly, meaning some questionable claims are not challenged, the Government said.

Justice Secretary Chris Grayling said: "Honest drivers have been bearing the cost of a system that has been open to abuse and it is time for a change.

"We are determined to have an improved, robust system for medical evidence – so genuine claims can still be settled but fraud is driven out of the market."

James Dalton, Head of Motor and Liability at the Association of British Insurers (ABI), said: "This is welcome news. The cost to honest motorists of exaggerated and fraudulent whiplash claims still remains too high so any move to reduce the 'have a go compensation culture' is supported by insurers.

By Vicky Shaw, Press Association Personal Finance Correspondent