Last year, the UK Government and the Ministry of Justice announced that they will implement the new whiplash compensation claim guidelines this year. On April 2013, no win no fee will replace the win/lose no fee whiplash claims in the United Kingdom to lower the number of fraud cases coming into insurance companies. The government will also be banning legal fees, such as the insurance-law firm referral fees, and will be increasing the Small Claims Courtâ€™s compensation from ÂŁ2000 to ÂŁ5000.
The authorities formulated the new guidelines after traffic incident reports conclude that a 70% rise in whiplash compensation claims last year occurred amidst a 25% reduction in traffic accidents, indicating a rise in the number of fraud claims. The insurance industry also reported a ÂŁ2 million yearly loss for compensating fraudulent whiplash claimants because insurance companies could not verify the truth in some claims.
Today, the government requires claimants to have two medical opinions from two medical professionals to validate their whiplash injuries. The two reports should agree with each other and show identical results. A threshold of 10km/h speed limit will be the indication of whiplash injuries. The Ministry of Justice also has a medical board to investigate a claimant before awarding compensation.
The no win no fee compensation claims system will also reduce the number of fraudulent claims from coming into the legal system. The independent medical board assures that only genuine claims will receive full compensation regardless of the no win no fee compensation regulation.