Fees to be cut for whiplash medical reports
In a bid to tackle fake claims and the growing compensation culture, the government has announced plans to cut fees for whiplash medical reports in England and Wales.
From October, medical professionals will only be allowed to charge £180 for an initial whiplash report - currently, prices of up to £700 are being charged.
The government believes this will reduce the amount being paid by insurance companies for exaggerated claims.
There are around 500,000 whiplash claims each year, which insurance firms say add about £90 a year to the average motor insurance policy.
As Aviva reported earlier this year, fraudulent 'slam-ons' - road traffic accidents deliberately caused in order to claim for whiplash compensation - increased by 51% in 2013.
The new measures follow on from reforms last year to no-win no-fee deals. Lawyers can no longer double their fees if they win, at the expense of defendants and their insurers.
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."
Other measures going through the courts that will come into effect at the same time include stopping experts who produce medical reports from also offering treatment to the injured claimant - this will ensure that there is no incentive for doctors to encourage unnecessary treatment.
Insurers are also being discouraged from settling whiplash claims without a medical report. In the past, insurers have settled claims without evidence in order to speed up the claims process - meaning some bogus claims have been settled.
Commenting on the new rules, Martin Milliner, claims director at LV= car insurance, said: "We welcome the Ministry of Justice's proposals to fix the medical examination fees for personal injury claims and to break the link with the 'examining expert'.
"Medical practitioners face a clear conflict of interest when producing a report for a client that has a vested financial interest in the outcome. These measures will go some way to help reduce overall claims costs. However, the devil is in the detail and it will be interesting to see how these proposals are implemented."