Government’s Comprehensive Spending Review reveals crackdown on compensation culture

03rd Dec 2015

Chancellor of the Exchequer George Osborne announced the Comprehensive Spending Review and Autumn Statement, telling MPs that the government plans to “bring forward reforms to the compensation culture around minor motor accident injuries”.  The government will seek to end cash compensation for minor whiplash injuries in an attempt to reduce high premiums for responsible motorist who are penalized with high premiums due to fraudulent claims made by other motorists.  Additionally, the government plans to lessen legal costs by “transferring personal injury claims of up to £5,000 to the small claims court”.

A public opinion survey released by the Justice not Profit campaign in September revealed a growing compensation culture in England and Wales.  77% of those surveyed believe there is a new breed of ‘ambulance chasing lawyers’ that are out for all they can get.

BBC News reports that the UK is being called the “whiplash capital of Europe”, costing the insurance industry around £2bn a year.  ABI Director General Huw Evans said that the announcement is, “[a] significant breakthrough in tackling the compensation culture and is good news for motorists”.  The proposed reforms would result in a decreased cost for providing insurance of £1bn and an average annual saving of £40 to £50 per policy holder.