Fears that George Osborne's whiplash clampdown could see cyclists denied justice

Fears have been raised that proposals to eliminate bogus whiplash claims by raising the small claims court limit, announced by Chancellor George Osborne in his autumn statement last week, will prevent cyclists injured in road traffic collisions from obtaining compensation from a driver who is at fault.

The government plans to raise the small claims court threshold from £1,000 to £5,000 as well as encouraging that compensation awards take the form of services such as physiotherapy rather than cash.

Cycle insurance specialist the Environmental Transport Association (ETA) believes the way in which costs are awarded in small claims courts means many personal injury lawyers will leave the market if the limit is raised, leaving victims without legal representation.

“Details of the changes are not yet clarified, but the time and bureaucracy involved in making a small claim with no prospect of cash compensation is likely to put many vulnerable road users off pursuing a claim,” says the ETA.

“There is a move away from cash compensation towards awarding physiotherapy only for soft tissue injuries.”

Spurious claims for whiplash cost the insurance industry an estimated £2 billion a year and according to the government the amount of cash compensation in such cases “is out of all proportion to any genuine injury suffered,” reports the government.

In the autumn statement, Mr Osborne said a consultation will be held next year on plans to change the law to discourage false claims for whiplash, but there are concerns of a knock-on effect on other victims of road incidents.

> What does spending review and autumn statement say about cycling?

The Treasury said: “This will end the cycle in which responsible motorists pay higher premiums to cover false claims by others. It will remove over £1bn from the cost of providing motor insurance and the government expects the insurance industry to pass an average saving of £40-£50 per motor insurance policy on to consumers.”

The consultation was welcomed by the insurance comparison site comparethemarket.com, whose director of insurance, Simon McCulloch, quoted in The Mirror, said: “News that the whiplash cash cow, seemingly abused for too long by fraudsters, is to be tackled head on can only be good for honest motorists.”

But insurance brokers have questioned whether the savings would indeed benefit policyholders, pointing out that while the money paid out for whiplash claims has fallen by a third in the past three years, motor insurance rates have risen and are expected to continue to go up.

And Tom Jones, head of policy at Thompsons Solicitors, which specialises in personal injury, said: “This latest move ... will hit those who most need the damages and who are least able to represent themselves or pay privately for legal advice.

“Most road traffic accident personal injury claims are worth less than £5,000 meaning that the rise in the small claims limit will leave the bulk of injured people out in the cold."

Depending on the outcome of the consultation, new rules may come into force from 2017.

> Driver who struck British Tour de France legend ordered to pay £15,000 compensation

The ETA added: "Fraudulent claims for whiplash has have cost drivers and insurers many millions of pounds, but the elimination of cash compensation for soft tissue injuries will have an unwelcome effect on vulnerable road users, a group already treated like second class citizens by the legal system.

“In the absence of the presumed liability that protects cyclist or pedestrians struck by a cars in other European countries, British cyclists are forced to argue for compensation – even when injury may have affected their recollection of events.

“When vulnerable road users are through no fault of their own, it is right and proper that they receive compensation for what is always a traumatic event,” it concluded.

> Video: Chris Boardman's 3 cycling lessons UK can take from Denmark