The Ministry of Justice will publish an action plan based on recommendations made by the Insurance Fraud Taskforce, which was set up to review the scale of the problem and put forward ways of reducing fraud.
Justice minister Lord Faulks said that insurance fraud was estimated to cost policyholders up to £50 each a year and the country more than £3bn.
However, that figure was challenged by the Association of Personal Injury Lawyers (APIL), which urged the government to obtain independent evidence. APIL president Neil Sugarman said there was ‘no independent evidence available, as far as we are aware, which paints a clear picture of the situation, and we know figures for personal injury fraud are routinely distorted by the insurance industry’.
He said, ‘The facts available suggest that only 0.25% of motor claims are actually proven to be fraudulent. That includes policyholders over-egging their own claims, or making false declarations when they apply for insurance. Only a fraction of those will be whiplash claims.’
For fraud to be tackled effectively, Sugarman said it was critical that the government ‘aims at the right target, and the only way to do that is to commission proper, independent research’.