Around 600,000 whiplash claims are made each year – adding £90 to the average car insurance policy – despite a drop in the number of accidents. As a result, insurance premiums increased 16.4% last year.

As a result, the report from the House of Commons Transport Committee has advised that the Government should impose a higher threshold for the payment of any compensation in whiplash cases.

The report said: ‘We recommend that the bar to receiving compensation in whiplash cases should be raised.

‘If the number of whiplash claims does not fall significantly as a result there would, in our view, be a strong case to consider primary legislation to require objective evidence of a whiplash injury, or of the injury having a significant effect on the claimant’s life, before compensation was paid.’

The committee has also called for a ban on the practice whereby insurance companies receive referral fees for passing on the details of policyholders that have had accidents to solicitors, garages and credit hire firms.