Louise Ellman MP, today launched a report on the review of the law relating to fraudulent motor insurance claims.

The Chair of the Transport Committee said:

“This is our fourth report on the cost of motor insurance and while premiums are now falling, aspects of the market remain dysfunctional and have encouraged criminality to take root. Further action is still required to tackle fraud whilst protecting genuine claimants. The Government must prohibit insurers from settling whiplash claims before the claimant has undergone a medical examination. Action is required to prevent abuses arising from Alternative Business Structures that allow solicitors to commission medical reports on whiplash and other soft tissue injuries from medical experts who are not genuinely independent.”

The report outlines the proposals endorsed by the committee. The Committee endorses the Government’s proposal to require courts to strike out “dishonest” insurance claims, this is intended to target those involving gross exaggeration. However, the report also states that legislation in this area could lead to legal complications and should not be made in haste.

The report also asks that the current proposal for data sharing about potentially fraudulent claims between insurers and claimant solicitors to be made compulsory rather than voluntary, as it currently stands.Moreover, the committee urges the Government to oversee funding arrangements for the police Insurance Fraud Enforcement Department, to make sure that this unit, has a secure future.It has been stated that the reform is mainly targetting whiplash injuries which are being over-exaggerated and not adequately verified by medical experts.

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