Despite a number of Government reforms designed to address the issue, the scale of the “compensation culture” problem around whiplash claims is highlighted in a new report from AXA UK, Whiplash: consumer perspectives on a UK compensation culture pandemic. Ten per cent of the [2,000] UK consumers polled said that they had either committed whiplash fraud themselves or knew someone that had done so.
- One in ten respondents to AXA report admit to having made, or knowing someone who has made, a fraudulent or exaggerated whiplash claim in the past;
- While acknowledging that medical examinations already apply, AXA believes these should be carried out by independent and specifically accredited medical examiners;
- Almost two thirds (62 per cent) would support the introduction of mandatory medical examinations even if it resulted in their insurance premiums rising in the short term;
- Widespread calls to reduce the timeframe permitted for whiplash claims – two thirds (67 per cent) think the time limit should be six months rather than existing three years.
Chris Voller, AXA UK Claims Director, said, “One might expect that the percentage of people admitting to being or knowing a fraudster is lower than the real number but even at the level indicated in our survey, the amount of fraud taking place is disturbingly high. This reveals the scale of the problem and the uphill challenge the UK Government and insurance industry still face if this proportion is to be reduced in the mid to long term.”
AXA’s report reveals a consensus that whiplash claims and injuries associated with such claims are an area open to fraudulent activity. Over three quarters (78 per cent) agree that “being able to claim for whiplash/whiplash-related injuries is open to abuse” and 73 per cent agree with the statement that it “is easier to embellish a whiplash claim as compared to other types of insurance claims”.
There appears to be a prevailing opinion amongst people that the severity of the injury must be assessed to ascertain whether someone can properly be said to have whiplash. While the UK public overwhelmingly think that the requirement to undergo a medical examination to prove an injury will act as a deterrent to fraudsters, AXA believes that this should be carried out by an independent medical examiner.
Nine out of ten people (89 per cent) say that fraudulent claimants will be put off if these measures are introduced. Indeed, eight in ten (79 per cent) believe that medical examinations should be made mandatory in all whiplash cases, with over half (55 per cent) going further and stating that an independent professional medical examiner should be responsible for deciding that a person has suffered a whiplash injury for the purposes of making a claim.
Whiplash fraud is deemed to be a significant enough problem that people are even prepared to pay extra in the short term if it helps to eradicate whiplash fraud in the long term. Sixty-two per cent of respondents would support the introduction of mandatory medical examinations “even if it resulted in their insurance premiums rising in the short term”. People currently have three years in which to file a whiplash claim but it is evident that many feel this is too long a period, with 67 per cent saying that the time limit should be restricted to six months.
Chris Voller added, “There appears to be a general feeling of scepticism around those who claim for whiplash injuries up to three years after the accident. That lack of sympathy can, perhaps, be attributed to the role that Claims Management Companies play in encouraging such claims. Although the UK Government has shown no appetite to alter the status quo in terms of imposing a tighter timeframe, we would like to see a maximum time limit in the UK, similar to that used in Sweden where, typically, claims presented more than three to four days after the accident are usually rejected. “Although the reform agenda is underway and recent statistics from the ABI have shown that motor premiums have come down, what we haven’t seen is a decline in the frequency and number of whiplash related claims, so there is still more that needs to be done.”
Commenting on the report, Professor Chris Parsons, Cass Business School, said, “Although the amounts of compensation paid to whiplash claimants are relatively small, the claims handling costs that go with them, including the costs of investigation, processing and, possibly, lawyer’s fees and medical reports, are disproportionately large. For example, a payment to a whiplash claimant of a thousand pounds or so may ultimately cost the paying insurer two or three times that amount. Since whiplash claims are extremely common in the UK, the effect on motor insurance premiums is very significant. It is also probably fair to say that most whiplash claimants do not ‘need’ the compensation – on the basis that whiplash injuries are rarely permanent, life threatening, life changing or a source of significant expense to the claimant.”
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