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Government whiplash reforms to have positive effect on ‘crash for cash’, says IFB

The Government’s announcement of whiplash reforms has been welcomed by the Insurance Fraud Bureau, which says the proposals should help tackle ‘crash for cash’ schemes.

Police accident sign

It is hoped that the proposals will help tackle ‘crash for cash’ schemes.

Revealed yesterday, the proposals follow a recent consultation and cover raising the small claims track limit and capping the level of damages that can be claimed for whiplash.

In response, Ben Fletcher, director of the IFB, said: “One of the reasons that organised crime groups have orchestrated ‘crash for cash’ scams for far too long is that they’re perceived as low risk and high reward.

“It’s due to the amount of money in the system that fraudsters are perceiving this as an easy target and exploiting it, netting upwards of tens of thousands of pounds. By reducing the amount of excess money in the system, we hope to see a positive effect in helping to tackle these scams, as the criminals recognise that the risks are higher and the rewards are lower than they once were.

“The effects and harm caused by these scams is wide reaching from those plagued by nuisance calls. It is also a burden on the innocent policyholder who is asked to cover the cost and the road users whose safety are being put at risk by criminals targeting them to deliberately cause a collision. In taking some of the excess cash out of the system, we hope that it will help to positively influence the level of ‘crash for cash’ fraud that we see.”

Yet the Law Society said the proposals would deny access to justice for people who have suffered injuries in road traffic accidents.

A spokesperson said: “The government is treating injuries that would be regarded as grievous bodily harm in the criminal courts as small claims. A limit of £5,000 will mean injuries including facial scarring, fractured ribs, a bruised chest and whiplash to the neck would be considered as ‘small claims’. This means people will be forced to bring claims themselves without expert legal advice.

“The MoJ does not appear to have properly considered the fact that this will clog up the court system creating a David and Goliath situation where people recovering from their injuries, deprived of legal advice, have no choice but to act for themselves.”

However, Arc Legal Assistance (Arc Legal) said it believes the reforms will now provide the legal expenses insurance industry with the opportunity to develop and introduce new product and service models to support customers.

Richard Finan, director of Arc Legal, said: “With focus on the importance of having the customer at the centre of any product development, we believe there will be the opportunity to introduce new servicing models for lower value claims.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.