The UK's civil litigation system and wider compensation culture had led to a steep rise in road accident whiplash injury claims in recent years, the Association of British Insurers (ABI) has told the House of Commons Transport Committee.
The motor insurance industry paid out £10.7 billion in claims in 2011, of which whiplash claims cost approximately £2.2 billion, said the ABI in written evidence to the committee.
The ABI said that while there were a number of factors that affected the price of a premium, and individual insurers priced their policies differently, the cost of claims was highly indicative of the overall level of premium that an average motorist can expect to pay. It added that the average paid premium in 2011 was £440. With whiplash claims representing 20% of overall claims expenditure, this represents approximately £90 of the average premium.
The ABI, which is giving oral evidence to the committee later on Monday, said in its written evidence: "There are a number of contributing factors that have led to the rise in whiplash claims. The first factor is the dysfunctional compensation system which has led to a growing compensation culture in the UK.
Answering in its written evidence the question: "Is it correct in describing Great Britain as the 'whiplash capital of the world?', the ABI replied: "Yes". It went on: "Although the lack of an objective test for minor whiplash injuries is an international problem, it is the UK's civil litigation system and wider compensation culture which has led to the steep rise in whiplash claims in recent years."
The ABI added that little had changed since 2004 when Europe-wide research showed that the UK had twice the average percentage of whiplash claims as a proportion of personal injury claims compared with the European average. It added that latest figures show that "the UK (78%) still has substantially higher than average percentage of whiplash claims as a proportion of personal injury claims, than our EU counterparts (48%)".
Among the many groups that have also submitted written evidence on whiplash to the committee is the Association of Personal Injury Lawyers (APIL), which is also due to present oral evidence to MPs.
In its written evidence, the APIL, asked whether Britain was the world's whiplash capital, replied: "The Government's only source for this assertion appears to be a report from the Comite Europeen des Assurances which is nine years old and relies on figures which are even older than that."