The Government is to bring in independent medical panels from next year in an attempt to weed out bogus compensation claims for whiplash.
Justice Secretary Chris Grayling said that work is to begin with experts to put the panels together quickly. The process will involve: developing a scheme for accrediting medical experts who can assess whiplash injuries; enhancing the medical reporting process; improving information for medical assessments; and carrying out spot checks to ensure quality.
Additional plans for improved data sharing by insurers will also be used to help the police and the specialist Insurance Fraud Enforcement Department, to track down criminal fraudsters.
Although the number of claims has fallen since 2011, the Government says that there were still almost half a million whiplash claims in 2012 and that they have cost insurers more than £2bn in payouts, leading to an average premium increase of £90 for drivers.
Each whiplash compensation payout costs an average of £2,400 insurers say, with an additional £2,000 in legal costs.
Justice Secretary Chris Grayling said that "whiplash cheats" have helped to force up average motor insurance premiums and will, as a result, be targeted by panels that will ensure that only evidence from accredited professionals can be considered.
“We are turning the tide on the compensation culture by tackling high insurance premiums and other motoring costs.
“It’s not right that people who cheat the insurance system get away with it while forcing up the price for everyone else – so we are now going after whiplash fraudsters and will keep on driving premiums down,” said Grayling.
Laurence Besemer, chief executive of the Forum of Insurance Lawyers (FOIL) said that the organisation welcomed the Ministry of Justice's announcement, and was looking forward to participating in any consultation on the make-up and remit of these medical panels
"In common with all of those involved in the claims process FOIL wants to see systems in place which deal fairly with those who have been injured, while blocking attempts to cheat the system and commit fraud," he said.
"This is in line with recommendations which we made together with the ABI, MASS and AMRO in the summer to Chris Grayling, which called for the use of accredited doctors, creation of new central body to provide accreditation of panel doctors and a scale of fixed costs. Set up correctly this could help to change the claims landscape for the good."
Curiously, at the same time as announcing the introduction of the panels, the Government chose to highlight new statistics from the AA showing that motor insurance premiums are now falling at the fastest rate since 1994.
The average insurance policy, fell from £648 in October 2012 to £568 in October 2013, a drop of 12.3%.