MPs on the Commons justice committee have announced a new inquiry into whiplash claims and the effects of sweeping reforms to the sector.

The committee will look in particular at what has happened to the number of low-value personal injury claims and whether the government has met its objective of reducing whiplash costs and passing on these savings to motorists through lower insurance premiums.

The Civil Liability Act was enacted in 2021 and removed the recoverability of costs for whiplash claims valued under £5,000. At the same time, a portal called Official Injury Claim was set up to handle such claims, with the intention that unrepresented claimants could run their own case.

The evidence of the first 18 months of the portal would indicate that 90% of users are still represented, but there has been an overall reduction in the number of claims from the pre-reform years.

Whether the reform programme has reduced insurance premiums is more difficult to assess. Before the act, the government stated that insurance claims for whiplash were costing £2bn a year, adding an average £90 onto premiums. Ministers have at various points pledged that they could deliver savings of between £35 and £50 for motorists.

Sir Bob Neill, chair of the justice committee, said: ‘Whiplash injury claims have been costing motorists a disproportionately large amount of money and taking up a lot of precious court time. That’s not to minimise the pain and suffering such injuries can cause. But if we can find a way of saving money and court time we should do so.

‘So we’ll be looking carefully into the way claims are being processed and how much they cost motorists and the wider tax-paying public. We want justice to prevail, but we want it to be efficient as well.’

The committee inquiry will also invite comment on the new fixed tariff for whiplash compensation and ask whether the portal is accessible for claimants and their representatives.

Submissions are being accepted until 17 March, and evidence sessions with key figures in the legal and insurance sectors will follow.

 

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