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What The Government Can Do with Requests for Whiplash

by Daniyal
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Introduction

Whiplash claims are compensation for injuries suffered injuries as a result of a road accident. In the United Kingdom whiplash damages have become too common among victims of accidents to an extent that local insurance companies are now facing problems expending the damages. The main problem that calls for government intervention stems from the difficulty in determining that a claimant is indeed suffering from a whiplash injury. As a result, rampant cases of fraud, lack of discipline on the road and heavy cost of motoring have led to an increase in the number of such cases[1]. This paper examines the approaches which the government can take to rein in the problems relating to whiplash claims.

Background of Whiplash Claims

Whiplash damages are generally split into two categories: general damages are computed in keeping with the gravity of the bodily harm and the impact it may trigger on an individual’s life. Secondly, special claims seek to defray tangible expenses which an individual has suffered as the result of an accident[2]. These costs combined, make up an individual’s total moneys due for compensation. It is notable that special damages comprise of out of pocket outlays such as fare, health facility visits and parking fees, loss of wages, medical costs, extra household expenses, and other costs of care incurred by the recovering patient. There may be additional costs that an accident victim can claim following their whiplash injury, depending on the facts of the case and the extent of the injury[3]. The lack of strong regulations really call for government input.

What The Government Can Do with Requests for Whiplash

Why The Government Should Streamline Whiplash Caims

(a) Under-Settlement of Whiplash Claims

The rapid increase of whiplash claims in the UK in the recent past has touched off two fundamental problems that the government needs to rein in, in order to streamline the processes by allowing right amounts of compensation for the right persons. Insurance companies have been accused of under-settling whiplash claims moved by victims of accident against them; and secondly, claimants have also been accused of exploiting the slacken whiplash laws to defraud insurance companies of their hard-earned cash under the disguise of staging genuine claims[4]. This is mostly the case, considering that proving whiplash cases using common diagnostic equipment is not always easy. Therefore, both ends of the claimant and the insurer have to rely on the statements of the latter, most of which may be fabricated for financial expediency, hence the lack of authenticity on the claims.

(b) Rampant Cases of Fraud

The government should rein in rampant cases of whiplash fraud in the UK. Up to half of all whiplash claims arising from car accidents are laced with fraud, according to the Association of British Insurers (ABI). The substantial number of bogus whiplash claims can be attributed to the easiness of the victims to fake the symptoms. Insurance companies are also suffering from exploitation by a cartel of ‘claims manufacturers’ who upped their game of persuading drivers into filing for easy claims that would otherwise not suffice under reasonable conditions. In addition, fraudulent acts of whiplash claims are compounded by the low thresholds of medical and legal issues that cannot deny fakers the opportunity to receive compensation for what they do not deserve.

The substantial number of half of the whiplash claims being fraudulent means that more than 50% of about £2billion in annual compensation claims for an estimated 550,000 such claims enters into wrong hands. The figure translates into £1billion of scam every year. The revelation confirms the dangerous trend in the United Kingdom, which places the country in the first position when it comes to such fraudulent claims in the world. One of the main factors deepening the whiplash disaster is that insurers find it a lot cheaper in terms of time and financial resources to give in to such compensations than stage long-drawn legal battles aimed at proving that whiplash claims are fraudulent. In addition, fraudsters are gaining insurance compensations for stage-managed car crashes which are aimed at gaining finances through the submission of untrue claims for injury on one’s person and or damage to their insured trucks. According to insurance experts, whiplash claims bolstered by the possibility to obtain easy cash has increased insurance costs by £90 per annum[5].

(c) Heavy Economic Costs

The level of the whiplash scams in England and Wales is particularly more pronounced than in other European countries such as Germany, because in the latter jurisdiction, there are no laws limiting professional fees related to such claims. According to researchers, claims for whiplash injuries have increased, despite the sharp rise in the number of car accidents, because individual UK citizens are encouraged by the ease of making successful financial claims at a time when the country is facing financial hardship. According to research findings, UK’s insurers have been forced to grapple with between 10 and 60 per cent of overstated, distorted or fraudulent whiplash claims, with statistics indicating that the claims are highest within the specified range[6].

Although, insurers are convinced that an estimated 50 per cent of whiplash claims are bogus, hunting for adequate proofs that can warrant a denial of compensation to claimants in not an easy task, considering the fact that there are no stringent laws which support corroboration of the claims before the release of funds. Potential claimants find it so simple to fake and overstate or misrepresent facts in their favour. Owing to the negative economic impacts of fraudulent whiplash claims on insurers in the form of shrinking profits, the government should crack down on the manufacturers of claims in the United Kingdom which is said to have grown rapidly within the last two decades to fleece insurers of their hard-earned finances.

Possible Government Responses

(a) Enacting Stricter Scrutiny Policies

An immediate need has been rendered for the government to implement more stringent policies that would cut into the business operations of the claims manufacturers and weed out undeserving claimants. It is arguable that by establishing a more thorough test, more cases of the illegitimate claims will be challenged and beneficiaries of the fraudulent acts blocked[7]. Compared with Germany, the United Kingdom receives extremely higher cases of whiplash claims, not because the latter’s citizens have poorer health, but due to the existence of stronger regulations which have cut down such costs in the country. A regulation of attorney’s fees, for instance, will drastically reduce the cost in the UK by at least five times. This is especially true considering that in Germany, lawyers charge about £300 for handling a single whiplash compensation case, while in the UK, the cost is five times higher.

(b)  Licensing Specialized Doctors

Top on the government’s agenda should be policies geared towards making it harder for fraudulent claims to go through the procedures. The Ministry of Justice should establish new, independent medical panels mandated to carry out more thorough screenings for the symptoms of whiplash injuries on the victims, and empower insurers with more stringent laws that would enable them to sieve out bogus whiplash claims. In establishing a medical panel, the government should set up a system for certification of medical practitioners, so that only individuals who have met the minimum thresholds will be permitted to practice as examiners of the injuries for insurance purposes. The doctors would be required to examine the claimants’ medical history in an effort to deny fakers or those who have medical preconditions the opportunity to obtain claims which they do not deserve[8].

In addition, the government should raise the threshold of damages which small claims court can resolve for cases involving personal injury from £1,000 to 3,000 or more. This would lead to an increase in the number of settlements at the lower judicial level and serve to limit the total amount of claims. Under such a system, honest drivers would be protected from speculative claimants or fraudsters when such claims are tabled before a competent judge, so deserving claims can be expended and fraudulent ones blocked. These efforts would reduce more than half a million whiplash-related indemnity claims by at least 10 per cent.  

(c) Enhancing Driver Training and Accountability

Despite the fact that the expenses associated with handling personal injury claims have increased over the recent past, an overall drop in the quantity of road accidents is baffling. Regardless of the conflicting reports, the government is under the obligation to implement tougher measures that would establish whether victims of accidents played role in the accident as opposed to the general rule of heaping all the blame on the other party. Drivers who over-speed and apply emergency brakes irregularly on the roads, for example, can cause motorists who are behind to rear-end them and claim whiplash claims from the motorists when in the real sense it was their fault which resulted in the accident. Such cases of fraud by design should be looked at separately and individually in an effort to rein in the undeserving whiplash cash claimants[9]. By creating an environment where all drivers on the road are responsible, 1,500 cases of whiplash claims reported very day would drop substantially.

(d) Lowering Car Ownership and Maintenance Costs

The government should also lower whiplash injuries and the resulting claims by facilitating the acquisition of important documents for road use[10]. This initiative may include lowering the cost of obtaining a provisional driver’s license from £143 to improve enrolment and training of drivers that would enable them to respond more effectively to modern challenges on the road. By lowering the cost of owning and maintaining a car, whiplash injuries and claims will reduce drastically because individuals who deliberately crash their vehicles in expectation of hefty compensations will no longer find the fraudulent habits worthwhile.  

Conclusion

Whiplash injuries and the resulting claims are common in the United Kingdom more than anywhere else in the world. This is not say drivers and passengers in the United Kingdom have the weakest spines in the whole world. Rampant cases of whiplash claims in the country are facilitated by weak laws regulating such claims. As of now, victims of whiplash injuries often have a field-day; they can fake, misrepresent, or exaggerate such claims and get away with it. As a result, insurance companies in the United Kingdom do compensate between 10-60% of more than 500,000 cases of irregular whiplash damages annually. The amount translates to £1billion of scam every year. In light of the problem, the government should curb irregular claimants by: controlling attorney fees; issuing licenses to specialized doctors to help with diagnosing for whiplash injuries; making all drivers responsible on the road by carrying out impartial investigations of accidents, and; lowering the cost of owning and maintaining a car as a way of neutralizing handsome rewards which currently entice “crash for cash’ drivers.

 Bibliography
  • Biering-Sørensen et al, (2014), ‘The return-to-work process of individuals sick-listed because of whiplash-associated disorder: a three-year follow-up study in a Danish cohort of long-term sickness absentees’, 14 BPH 1
  • Derrig, Richard A., (2002), ‘Insurance Fraud’, 69 JRI 271
  • Great Britain: Ministry of Justice, (2012), Reducing the Number and Costs of Whiplash Claims:A Consultation on Arrangements Concerning Whiplash Claims in England and Wales, The Stationery Office: London
  • Hanman, Tim, (2009), ‘FRAUD: Fighting Motor Fraud’, 59 IBM 33
  • Hutton, Jamie, (2011), ‘Ten ways to reduce claims costs now: effective data-driven approaches’, 59 C 37
  • Light, Donald, (2009), ‘Hard Times, Claims Fraud, and Mitigation Technology’, 11 TD 34
  • Mangla, Ismat Sarah, (2009), ‘5 Things Never to Say to Your Insurers,’ 38 M 32
  • MarketWatch, (2012), ‘UK should follow Europe’s lead in responding to the whiplash epidemic,’12 MWFS 32
  • Mlleson, Andrew, (2005), Whiplash and Other Useful Illnesses, McGill-Queen’s Press – MQUP: London
  • Sterling, Michele, and Kenardy, Justin, (2011), Whiplash: Evidence Base for Clinical Practice, Elsevier Australia: Sydney
  • [1] Mlleson, Andrew, (2005), Whiplash and Other Useful Illnesses, McGill-Queen’s Press – MQUP: London,  pp.89-123
  • [2] Sterling, Michele, and Kenardy, Justin, (2011), Whiplash: Evidence Base for Clinical Practice,  Elsevier Australia: Sydney, p.5
  • [3] Great Britain: Ministry of Justice, (2012), Reducing the Number and Costs of Whiplash Claims: A Consultation on Arrangements Concerning Whiplash Claims in England and Wales, The Stationery Office: London, pp.12-50
  • [4] Hutton, Jamie, (2011), ‘Ten ways to reduce claims costs now: effective data-driven approaches’, 59 C 37
  • [5] MarketWatch, (2012), ‘UK should follow Europe’s lead in responding to the whiplash epidemic,’ 12 MWFS 32
  • [6] Mangla, Ismat Sarah, (2009), ‘5 Things Never to Say to Your Insurers,’ 38 M 32
  • [7] Light, Donald, (2009), ‘Hard Times, Claims Fraud, and Mitigation Technology’, 11 TD 34
  • [8] Biering-Sørensen et al, (2014), ‘The return-to-work process of individuals sick-listed because of whiplash-associated disorder: a three-year follow-up study in a Danish cohort of long-term sickness absentees’, 14 BPH 1
  • [9] Hanman, Tim, (2009), ‘FRAUD: Fighting Motor Fraud’, 59 IBM 33
  • [10] Derrig, Richard A., (2002), ‘Insurance Fraud’, 69 JRI 271

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