Anyone exaggerating whiplash or other injuries to get compensation will be thrown out of court in a Government crackdown on dishonest claims.
Insurance premiums have been pushed up by “compensation culture” inflated by the no win, no fee industry, according to the Ministry of Justice.
Figures from the Association of British Insurers show that the number of dishonest motor claims increased by 34 per cent to a record 59,900 in 2013, with a value of £811 million.
The new measures aim to make it harder for fraudsters to profit from exaggerated injuries or contrived “accidents”, both on the road and at work or in public places.
Courts will throw out compensation applications in full where claimants have been “fundamentally dishonest” to stop people exploiting the system by making bogus claims or grossly exaggerating the extent of their injuries.
Whiplash claims are a particular target and people will have to have independent medical assessments with fixed fees to claim compensation.
Rules will also restrict the ability of lawyers to settle claims without confirmation of the claimant’s injury.
A cursory look at Google reveals the prevalence of “compensation culture”.
Searching “whiplash” throws up a clutch of compensation law firms. “Had a whiplash injury? Make a claim today,” urges one result.
Incentives used by lawyers to encourage claims like cash or iPads will be banned.
Chris Grayling, the Justice Secretary, said the average motor insurance premium has fallen by more than £100 in the past year thanks to Government measures.
He said: “The new measures are the latest stage of the government’s delivery on the commitment to deal with high insurance costs made by the Prime Minister at an insurance summit in 2012.”
Insurance firms have assured ministers they will pass any savings from the reforms to customers.
Otto Thoresen, director general of the Association of British Insurers, said: “These changes are a very positive development for the vast majority of honest insurance customers who end up paying for the fraud of the minority.”