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MPs call for insurers to stop whiplash fraud

The recommendations are part of a new report, released today (4th July) by the Transport Committee to review the Government’s plans to tackle fraudulent and exaggerated motor insurance claims, announced last month.

Louise Ellman MP, chair of the Transport Committee, said: ‘This is our fourth report on the cost of motor insurance and while premiums are now falling, aspects of the market remain dysfunctional and have encouraged criminality to take root. Further action is still required to tackle fraud whilst protecting genuine claimants.

‘The Government must prohibit insurers from settling whiplash claims before the claimant has undergone a medical examination.

‘Action is required to prevent abuses arising from Alternative Business Structures that allow solicitors to commission medical reports on whiplash and other soft tissue injuries from medical experts who are not genuinely independent.

‘Solicitors must be banned from generating more work by offering inducements, such as cash or tablet computers, to encourage people to make a claim.’

The Transport Committee added that it calls on the Government to press the Solicitors Regulation Authority to stop some solicitors from playing the system to maximise their income by commissioning unnecessary psychological evaluations.

It also said that it endorses the Government’s intention to require courts to strike out ‘dishonest’ insurance claims (e.g. those involving gross exaggeration), but cautions against hasty legislation due to the complex legal implications.

Last month saw Aviva report that fraudulent “slam-ons” – often known as “crash for cash” – increased by 51% in 2013 to reach a record level, according to its claims fraud data. In response Aviva is urging the Government to implement stronger sentences to deter fraudsters.

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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.