Crackdown on Fake Injury Claims

The Ministry of Justice have announced measures to reduce the amount paid out by insurance companies for fraudulent cases. Courts will be given more powers to throw out cases where claimants have been dishonest.

Other changes include putting a stop to compensation culture by banning firms offering free incentives such as iPads and upfront cash payments. A Ministry of Justice spokeswoman says they intend to ban all inducements such as “welcome payments, free gifts, cash advances and discounted services.”

The reforms are intended to reduce car insurance premiums for honest drivers which are forced to pay higher premiums as a result of fraudulent payouts pushing up costs.

Association of British Insurers director general Otto Thoresen said: “These changes are a very positive development for the vast majority of honest insurance customers who end up paying for the fraud of the minority.”

Currently the courts can pay compensation to individuals even if it is found their injuries have been exaggerated. Under the new rules the courts would be required to block all compensation payouts unless it is determined a serious injustice has taken place.

Justice secretary Chris Grayling says the changes will lead to smaller premiums for drivers and that the changers will be put into legislation before the end of the current parliament in May 2015.

Improved medical examinations will also be introduced to reduce the number of bogus claims. People suffering from whiplash will be required to undergo an examination by an independent professional working for a fixed fee.

The changes are also intended to reduce the compensation culture in workplaces where workers file for compensation for “slips and trips”. Workers won’t be able to receive compensation without evidence of injuries sustained to them.

According to the Association of British Insurers, the number of dishonest insurance claims reach 59,000 in 2013, costing the industry £811 million. In spite of the rise in fraudulent claims, insurance premiums have fell by £100 in the last year which shows how far measures have already gone to tackle insurance fraud.

The Ministry of Justice has been assured that the savings to insurance companies will be passed onto consumers.

General PI News Making A Personal Injury Claim StockslegalJul 28th, 20140 comments