Compensation culture is vile but it may boost Treasury coffers

23.05.12

I have mentioned before the bittersweet joke told to me at least five years ago by the head of one of the big motor insurers - in the old days when a car crashed people would rush up to help the injured out of the vehicle. Today they rush in beside the driver and claim whiplash.

Insurance fraud always soars when times are hard so we should not be surprised - given the way whiplash grew in the good times - that this condition has now reached epidemic proportions, and accounts allegedly for £90 of the cost of any motor insurance policy. Nor should we be surprised that our publicity-seeking Prime Minister will want to be seen doing something about it. Hence yesterday's meeting in Downing Street with insurance industry heads.

But what to do? Insurers will no doubt want him to clamp down on the compensation culture. One insurance boss told me the other day he has a map on his wall showing the density of whiplash claims and another showing where the hotspots are for firms which promise to help claimants sue on a no-claim, no-fee basis. When one map is laid on the other, there is an absolute match: nothing from Scotland where claims farmers are illegal and a tidal wave of litigation from Merseyside where they grace every street corner.

Source: Evening Standard