Insurance fraud crackdown planned

Insurance fraud crackdown planned

Government plans to crack down on insurance fraud have been welcomed within the industry.

The moves announced by the Ministry of Justice mean that false whiplash claims and exaggerated workplace "trips and slips", plus the behaviours of "ambulance-chasing" lawyers could become a thing of the past.

Under the new measures, lawyers will be banned from offering incentives to accident victims in order to persuade them to pursue a claim, while courts will have the authority to throw out compensation cases where claimants are found to have been dishonest.

The knock-on effect of so-called 'compensation culture' in recent times has led to higher premiums for truthful customers; some 59,9000 dishonest claims set insurers back £811 million in 2013, the Association of British Insurers (ABI) said.

The new proposals aim to tackle this by reducing unnecessary payouts for insurance firms, with independent medical assessments carried out at a fixed fee being one means of accomplishing this.

Otto Thoresen, director general of the ABI, praised "very positive" changes for rewarding the honest and punishing the fraudulent minority.

He said: "We applaud the decision to ban the distasteful advertising which offers cash or other inducements for personal injury claims.

"This only serves to reinforce to unscrupulous claimants that there is a compensation culture to exploit."

Copyright Press Association 2014