Oral Answers to Questions

Debate between Shailesh Vara and Stephen Mosley

Tuesday 9th September 2014 Commons Chamber

[Stephen Mosley (City of Chester) (Con)]

9. What steps his Department has taken to prevent insurance fraud.

[The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)]

I can assure my hon. Friend that the Government are committed to tackling insurance fraud. We are banning lawyers from offering inducements in personal injury claims and are legislating to penalise fundamentally dishonest claimants. We are also consulting on a requirement for lawyers to undertake previous claims checks on whiplash claimants, which will combat fraud at source.

[Stephen Mosley]

It is estimated that insurance fraud and exaggerated claims cost some £2.1 billion last year, with motor insurance alone costing about £811 million. Ultimately, it is not the insurance companies that pay out, but the consumers, who pay for it through higher insurance bills. What further measures is my hon. Friend taking to tackle the compensation culture in this country?

[Mr Vara]

The compensation culture to which my hon. Friend refers means that honest drivers are having to pay higher premiums because of abuses, especially in whiplash claims. That is why the Government have put in place measures to deter unnecessary speculative and exaggerated claims, while ensuring that genuine claimants can come forward and have proper redress. In the first phase of our measures, which will start next month, there will be fixed costs of £180 for medical reports, which in the past had been as high as £700.