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Government unveils crackdown on bogus 'whiplash' claims

A file photo of a driver at the wheel of a car. Credit: PA

Plans to crack down on the "epidemic" of whiplash claims have been unveiled by the Government.

The Ministry of Justice (MoJ) has launched a consultation on cutting the high number of whiplash claims - which push up honest motorists' insurance costs - allowing insurers to lower their premiums.

They said insurers have pledged to pass on any savings to customers, thought to be in the region of £1bn.

As a result of the clampdown, motorists could see their premiums reduced by £40 a year, according to the MoJ.

They said a predatory claims industry encourages minor, exaggerated and fraudulent claims which are 50% higher than they were 10 years ago.

Justice Secretary Liz Truss. Credit: PA

The consultation, which runs until January 6 2017, could see a cap put on the amount people can claim, or scrap the right to compensation altogether.

Justice Secretary Liz Truss said: "For too long, some have exploited a rampant compensation culture and seen whiplash claims an easy payday, driving up costs for millions of law-abiding motorists.

"These reforms will crack down on minor, exaggerated and fraudulent claims."

Speaking to Good Morning Britain (GMB) Ms Truss said the new crackdown was because whiplash was "very difficult to prove", resulting in people being "able to claim huge amounts of money".

Ms Truss said that reducing the amounts paid out would stop or decrease the number of exaggerated or fraudulent claims.

  • The footage in GMB's clip shows a fraudulent whiplash claim

The Conservative MP for South West Norfolk added that to get compensation people would need to undergo a medical examinations to provide them with a medical report, but people who were genuinely injured would not lose out.

"If you need physiotherapy or if there are issues with you going back to work there will be compensation," Ms Truss promised.

Economic Secretary Simon Kirby said: "One whiplash claim is paid out every 60 seconds and it is unacceptable that responsible motorists have to pick up the tab".

Introducing a range of measures, such as limiting the compensation payable for these injuries, will help create a more honest system that doesn't reward those who want to exploit it. If implemented, these reforms will ease some of the pressure recent increases in insurance premium tax and repair costs are already putting on premiums. We will need to study proposals carefully and look forward to participating in this consultation, and the debate about how we can ensure fair compensation for genuine claimants and a fairer deal for motorists.

– James Dalton, Association of British Insurers