British drivers could see their car insurance premiums fall by about £40 ($66.97) a year under plans to either eliminate whiplash claims or cap them.

The Ministry of Justice last week issued a consultation paper on plans to tackle fraudulent claims, just a month after the Association of British Insurers accused it of “rowing back” on the reform.

The Government says whiplash claims are 50% higher than a decade ago, despite UK roads being safer than ever, due to “a predatory claims industry” that encourages minor, exaggerated and fraudulent claims.

The reforms could save insurers an estimated £1 billion ($1.67 billion) in claims, which they have promised to pass on to policyholders through reduced premiums.

Capping whiplash compensation would see the average payout cut from £1850 ($3101) to a maximum of £425 ($712).

Compensation would be paid only with medical proof of injury.

Justice Secretary Elizabeth Truss says these and other proposed reforms will help end “a rampant compensation culture”.

Economic Secretary to the Treasury Simon Kirby says it is unacceptable that one whiplash claim is paid every 60 seconds.