The Bill is designed to make sure there is a closer connection between whiplash claims and medical evidence by introducing a ban on seeking or offering to settle whiplash claims without the appropriate medical evidence. That will discourage fraudulent claims, encourage insurers to investigate claims properly and protect genuine claimants from accepting a settlement without knowing the full extent of their injury.
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Finally, the Bill will change the way in which the personal injury discount rate is set to help ensure genuine claimants receive no more and no less than the 100% compensation they deserve. Under the existing arrangement, the discount rate often produces significantly larger awards than 100% compensation. In fact, according to work by the Government Actuary’s Department, claimants receive, on average, 125% of their intended award at the current discount rate.
This package of measures will keep the system fair by ensuring that claimants receive the compensation they deserve while ensuring that the public are not paying unduly high premiums. Together with the changes to the small claims limit, these measures will deliver some £1.1 billion-worth of consumer savings a year and could lead the motorists’ insurance premiums falling, on average, by £35 a year. That is very welcome to most families, and it is why this legislation is right, necessary and timely.