The Government has not yet set out exactly how it plans to stop the right to claim damages for whiplash type injuries. There is a promise from the ABI that such savings of up to £1billion per year could be passed directly to the public to reduce annual premiums.
With the ABI facing significant outlay in other areas such as the recent flooding in the UK, one may be sceptical that such a saving in one part of the industry will be passed on when losses are faced in another.
Let remember that in allowing this law to be passed, the public will potentially lose the right to compensation when faced with a disabling injury. As with the previous changes to the Legal Aid system, once such a right has been lost, it is highly unlikely it will ever be given back.
In his autumn statement, chancellor George Osborne pledged to end the right to cash compensation for minor whiplash injuries and raise the upper limit for personal injury claims in the small claims track from £1,000 to £5,000.Over Christmas the Ministry of Justice announced that leading motor insurers had promised to pass on to customers 100% of the savings they make from curbs on whiplash claims – estimated at up to £50 per motor premium.Last week, however, both the government and trade body the Association of British Insurers admitted there will be no industry audit to confirm that insurers keep that promise.