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Tackling the cost of motor insurance

Transport committee welcomes the government's clampdown on fraud.

Responding to the transport select committee’s follow-up report on the cost of motor insurance, the UK government has affirmed its commitment to implementing Lord Justice Jackson’s reforms in the Legal Aid, Sentencing and Punishment of Offenders Bill – including banning referral fees in personal injury cases. Jackson’s report looked at the reasons for the very significant increases in quoted premiums in recent years.

The threshold for road traffic accident (RTA) personal injury claims will be extended from the current £10,000 to £25,000 and fixed fees that lawyers can earn from such claims will be reviewed and reduced. The government will continue to tackle uninsured driving and fraud by working with the insurance industry to have better access to drivers’ records, but maintains that it is clear that all organisations that process personal data must comply with the requirements of the Data Protection Act 1998. It will also address young drivers’ risk and safety and encourage the growth of telematics.

The government’s response to the committee’s recommendations includes commissioning a report to review RTA protocol on referral fees; working with stakeholders to review the level of fixed costs associated with the protocol; and reviewing fixed penalty levels for some motoring offences such as speeding, mobile phone use and not wearing a seat belt.

Louise Ellman, committee chair, said: 

Our work on the cost of motor insurance has put this issue on the government’s agenda. I am encouraged by the government’s willingness to tackle fraudulent whiplash claims and insurance fraud but it’s vital we maintain adequate access to justice and that good intentions must be translated into action. The transport select committee will be watching to make sure all of this happens.

The transport committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Transport and its associate public bodies.