New law aims to reduce number of whiplash claims

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A new clampdown on whiplash claims is expected to cut car insurance premiums by about £35 per year.

Announcing the Civil Liability Bill, Justice Secretary David Gauke said the legislation introduces measures to reduce the "unacceptably high" number of whiplash claims.

These measures will ensure fairness to both motorists and claimants by:

- Setting fixed amounts of compensation for whiplash claims; and

- Banning the practice of seeking or offering to settle whiplash claims without medical evidence.

The Bill also includes changes to the way the personal injury discount rate for serious injuries is calculated.

Insurers have pledged to pass on the savings to drivers.

According to the Ministry of Justice, road traffic accident related personal injury claims are 50% higher than a decade ago, despite a fall in the number of reported accidents and the UK having some of the safest roads in Europe.

This rise has been fuelled by predatory parts of the claims industry that encourage minor, exaggerated and fraudulent claims, driving up the costs of insurance premiums for ordinary motorists, the Justice Ministry said.

Welcoming the government announcement, Huw Evans, director general of the Association of British Insurers (ABI), said: "If passed, these proposals would be great news for motorists. People and businesses are paying more for their motor insurance than ever before and we need changes to the law to tackle some of the root causes. Soft tissue injury claims have been rising year on year since 2014 as cold calling claims firms have thrived, driving up the cost of insurance.

"This Bill will ensure people in England and Wales receive fair compensation while reducing excess costs in the system."

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