31/07/2013 06:04 BST

New Measures To Tackle Compensation Culture

Embargoed to 0001 Wednesday July 31 File photo dated 11/06/13 of a general view of bank notes and coins as further Government efforts to turn the tide on the "compensation culture" and help bring down the cost of insurance premiums came into force today.

Further Government efforts to turn the tide on the "compensation culture" and help bring down the cost of insurance premiums have come into force.

The new rule changes mean that compensation claims for "slips and trips" and other injuries at work or in a public place can be handled in a simpler way, reducing the amount that defendants or their insurers have to pay in legal costs.

Claims for up to £25,000 for these types of injury can be handled out-of-court, using the same system which has been used to settle similar claims for road accident injuries. The Claims Portal will also now be able to handle road accident claims for up to this amount, raising a previous limit of £10,000.

The Government emphasised that the changes will not make a difference to the amount of compensation victims are able to receive. However, it should help to cut insurers' bills, enabling them to pass on these savings to customers.

High insurance premiums have been blamed for making it hard for schools, businesses, community groups and councils to stage activities, for fear that they might get chased through the courts if someone has an accident.

The changes came in as a report by the House of Commons Transport Committee called for insurers to end practices which encourage fraud and exaggeration in vehicle whiplash injury claims, which have pushed up premiums in recent years.

Changes to "no-win no-fee" claims were introduced in April as part of the package of measures to cut insurance costs. These include a ban on referral fees paid between lawyers and claims firms, while claims management companies are also not allowed to take fees from customers before a written contract has been signed.

Figures recently released from the Claims Management Regulation Unit (CMRU) based at the Ministry of Justice show the number of claims management companies registered to handle personal injury claims fell from 2,435 in March 2012 to 1,700 in June this year.

The industry has released figures showing its efforts to tackle insurance fraud, which is estimated to add £50 to everyone's annual insurance bill, have been successful. The Association of British Insurers (ABI) has said that the value of uncovered bogus insurance claims topped £1 billion for the first time last year.

The value of insurance frauds which have been exposed has nearly doubled since records began in 2007.

Justice Minister Helen Grant said: "We are turning the tide on the compensation culture which has pushed up the cost of insurance for drivers, schools and business - and taking another important step to reducing the cost of living for ordinary people."