Insurers and solicitors have clashed over the extent of the problems caused to the insurance industry by claims for whiplash injuries.
At a transport select committee investigation into whiplash claims in the House of Commons on 20 May 2013, MPs heard that up to 60% of such claims are either fraudulent or exaggerated.
A representative of Lloyd's Market Association said insurers were paying out around £2,500 per claim, when between 10% and 60% of claims were not genuine.
The number of whiplash claims has rocketed to around 550,000 a year, or 1,500 a day, handing insurers with a compensation bill of £2 billion and adding £90 to every premium. Insurers believe that claims management companies are sapping much of that money.
The Association of British Insurers says Britain's whiplash industry has pushed up motor insurance premiums by 20%. Between 2005 and 2010, whiplash claims soared by 70% but road traffic accidents fell by 23%, the ABI has said.
But a leading personal injury solicitor countered today that major car insurance companies are making huge profits that they could use to reduce premiums for drivers.
Thompsons Solicitors said all five of the top motor insurers increased profits in 2012 "contrary to the impression they give of being victims of mass fraud claims and losing money."
For example, Thompsons said Admiral made a profit from the UK car insurance market of £372.8 million in 2012 - a 19% increase on the previous year. But it increased its total dividend payout to shareholders by 20% to £245 million - equivalent to £81 per customer, the firm added.
Tom Jones, head of policy and public affairs at Thompsons, said: "Law firms are constantly accused of being 'ambulance chasers' by insurers and yet they have a vested interest in creating a sense of crisis and making it as hard as possible for people to make genuine claims.
"We accept a business is entitled to make a profit, but we believe it is unacceptable for us all to be running scared and for those who benefit from a captive market to heavily influence public policy.
"They present themselves as objective and concerned about motorists when in fact insurance companies are about maximising profits and do that by paying out as little as possible and charging as much as they can in premiums.
"It is absurd to suggest insurers are on the side of the motorist any more than big oil companies are. They are stirring up a debate about whiplash claims to divert attention from how much they profit from motorists."
The transport select committee also heard from doctors that whiplash injuries can occur in vehicles traveling as slow as 6mph. GPs have previously said whiplash injuries are notoriously difficult to diagnose.
The committee will continue investigating the whiplash industry, with a further session due to take place in mid-June 2013.