In Wednesday's Autumn Statement, The Chancellor took the opportunity to take another shot at 'compensation culture' by announcing that the government is 'determined to crack down on the fraud and claims culture in motor insurance'. 

The expectation is that 'this will remove over £1 billion from the cost of providing motor insurance. The government expects the insurance industry to pass an average saving of £40 to £50 per motor insurance policy on to consumers.'

The intention is that this will be implemented in two ways:

  • Measures to end the right to cash compensation for minor whiplash injuries
  • Removing legal costs by transferring personal injury claims of up to £5,000 to the small claims court.

The upping of the small claims court limit – effectively allowing limited fixed fees only on claims up to £5,000 – has been trialled before. However, the suggestion of removing general damages for whiplash claims is new and controversial and will no doubt meet stiff resistance.

The issue will be put out to consultation in the New Year and we await developments with interest.