Motorists have been paying £90 more for motor accident insurance policies because a great many are exaggerating fraudulent injuries. According to insurers, the industry loses more than £2 billion to fraudsters. The industry failed to disprove the soft tissue injury claims of whiplash and other non-immediate symptom injuries leading to the huge losses.
Chancellor George Osborne had targeted fraudsters in his Chancellor’s Spending Review and had focused on increasing the limits of the small claims court from £1000 to £5000. This would allow all soft tissue injury claims to receive a limited compensation and avoid ballooning costs caused by exaggeration. The only exception to this being workplace injury claims, which due to their complexity are exempt from this at present
However, the UK Law Society condemned the move. They said that Osborne’s solution guaranteed that insurers, who can afford legal counsel and representation in all claims, will leave victims outmatched as the latter would have to represent themselves in the small claims court. Society President Jonathan Smithers pointed out that victims will find navigating the “complexity of the small claims court” difficult.
Smithers also called out the government for abolishing all claims for soft tissue “minor” injuries. He said that it would leave facial scarring, which gains more than £5000 in compensation for emotional and psychological damages, left undercompensated.
The Select Transport Committee also condemned the proposals stating that Osborne only consulted with insurers and not the victims of such tragedies.