He said: “Now that you can only get in the region of £250 for whiplash set by the tariff, people can claim damages up to £2,400 because they’ve been shunted in a car park and hit their knee on the steering wheel.”
Under the 2021 Whiplash Reforms, the amount of compensation paid to victims of whiplash is now subject to tariffs, depending on how long the injury persists.
Claimants can receive up to £260 if they recover within three months, and £520 if they recover in six. The maximum amount of compensation for a whiplash injury is £4,345, for an injury lasting two years.
The Ministry of Justice said at the time the cap came in that the reforms would save drivers £1bn on their insurance premiums.
Figures show that the intervention helped to stem claims. The cost of injury claims settled by motor insurers has fallen by 27pc since the reforms according to the Association for British Insurers (ABI), a trade body.
The industry is now pressuring the Government to introduce similar legislation for other “mixed injury” claims.
In February the ABI lost a test case in the Supreme court aiming to limit payouts for such claims. It said it was “disappointed” with the ruling and claimed the “outcome risks undermining the intention of the whiplash reforms”
A spokesman said: “Motor insurers are doing all they can to keep prices as competitive as possible but this will only increase the cost pressures they’re facing. We’ll work with our members to consider the impact of the judgment alongside the steps we’ve already set out through our 10-point roadmap for tackling motor insurance costs.”
