The Government appears to be failing in its attempts to reduce legal costs from whiplash injury claims.
A report by the Institute and Faculty of Actuaries (IFoA) reveals that the average legal costs for small, whiplash-like third party injury (TPI) claims have jumped 15% since 2010 - when the Ministry of Justice introduced new measures in a bid to contain legal costs - to £2,500 per claimant.
Not only this, but the typical cost for insurers to settle each small TPI claim has increased from £8,400 last year to £10,000.
It all means that whiplash-like claims now account for 85% of the number of TPI claims and just under half of the cost.
The costs of insurance claims for private motor insurance, meanwhile, have shot up by 7% over the last 12 months, despite a 15% drop in quoted premiums. This has contributed to the expected £371 cost of a typical motorinsurance premium.
Although legal costs for whiplash claims are on the rise, the IFoA is hopeful that the Legal Aid, Sentencing and Punishment of Offenders Act introduced in April 2013 could potentially reduce such costs going forward.
Copyright Press Association 2013