LONDON -- When James Weeks was in a car accident in southern England late last year, he turned to an unlikely source to treat his whiplash and back injury: insurance company Norwich Union.

The United Kingdom's largest automobile insurer, Norwich Union, has set up its own medical clinic to treat victims of car accidents involving its policyholders. The pilot program is an effort to keep down accident claims and cut Norwich's escalating medical and legal costs.

The insurance company, which is owned by Aviva PLC, figures that by having its in-house doctors and physical therapists provide quick treatment to its policyholders or people making claims against its policyholders, it can speed up their recovery, thereby cutting costs associated with the injury, and limit the likelihood of adversarial legal claims later, says David Hooker, Norwich Union's head of claims.

At its clinic, which specializes in treating the whiplash cases that make up 80 percent of the injury claims on the company's car-insurance policies, Norwich Union pays medical costs itself. So Mr. Weeks didn't have to shell out cash for his six weeks of physical-therapy sessions at the company's clinic in Maidenhead in southern England.

The Norwich Union clinic is the latest, and perhaps most extreme, example of how insurers world-wide are looking for new ways to contain rising accident claims. In the U.S. and in Europe, some insurers have their own body shops to repair cars, and many have special agreements for discounts at some garages, called "preferred provider agreements." But Aviva seems to be the first to provide in-house medical treatment to claimants. In Germany, a recommendation by a national legal-representative body laid down in 2000 that insurance companies couldn't control a rehabilitation center.

In the U.K., the number and monetary value of bodily injury claims have soared since 1999 when legal reforms effectively streamlined access to courts for civil plaintiffs seeking redress for accidents. According to data from the Association of British Insurers, there has been a 250 percent jump in the amount paid out each year in such claims by U.K. auto insurers over the last five years. About 75 percent of those claims concern whiplash. In a typical court settlement, an insurer pays a whiplash victim about GBP 3,000, or roughly $5,000, plus GBP 2,000 in legal fees, Mr. Hooker says.

The U.K.'s national health service provides free medical care to citizens but many people opt for private treatment because of the long waiting times for treatment under the public service. By speeding up treatment, Norwich Union hopes to get victims back on their feet again more quickly, thereby cutting the amount they can claim for damages.

Aviva's pilot project of providing medical care has a staff of seven and a modest initial annual budget of GBP 1 million pounds ($1.7 million). Since opening in January, it has treated a little more than 240 patients. Norwich Union won't assess if the program is successfully cutting costs until it has treated about 500 patients and then it will decide whether to expand the program, Mr. Hooker says. So far, for example, the average number of physical-therapy sessions to treat each whiplash case at the clinic has been cut to four, from eight on a national basis, he says.

Not surprisingly, Aviva's experiment is proving controversial. Insurers face a conflict of interest in treating accident victims while trying to improve their own bottom lines, warn personal-injury lawyers (who themselves can benefit when accident victims sue.)

"Rehabilitation has to be done for the good of the patient and not for the good of the insurer," says Jennie Walsh of the U.K.'s largest personal-injury law firm, Thompsons Solicitors in London. "How do we know that what happens in rehab, the medical reports and all, are not being manipulated or led by the insurer's demands?" she asks.

Mr. Weeks, a 67-year-old garage employee whose Fiat Punto was written off as a wreck after last year's accident, was barely aware that the medical staff who treated his neck for whiplash and sore back at the Norwich Union rehabilitation center in Maidenhead were employees of the other driver's insurer. "There were a few Norwich Union pens lying around but that was about it," he says.

He ended up at the clinic because, after the other driver reported the accident, Norwich Union called him to suggest its own rehab center. Mr. Weeks wasn't hurt badly enough to justify emergency hospital treatment, but in following days, his sore neck and back prompted him to seek physical therapy. Although Norwich Union offers access to its clinic for claimants on its policies, it doesn't force them to attend the Maidenhead center and will still pay if they choose to attend other clinics, Mr. Hooker says.

Mr. Weeks didn't require an ambulance and visited the clinic, as an outpatient, once a week for six weeks. He has no objection to being treated by the insurance company's clinic. He says he was well treated, and doesn't feel that financial concerns ever outweighed medical concerns among clinic staff.

Mr. Hooker says there isn't a conflict. He says that claimants aren't obliged to go to the Norwich Union clinic and he says they like the offer of swifter treatment than the U.K.'s notoriously slow public health-care network can provide. "To offer help before cash is a good thing," he says.

Norwich Union's rehab clinic focuses on soft-tissue injuries, notably whiplash, doesn't try to be a full-blown hospital ward and isn't otherwise open to the public. Policyholders with serious injuries are sent to regular hospitals, which they can choose at their own discretion. Norwich Union hired Martin Strudley, a rheumatologist who founded his own private medical-care company called Rehabilitation UK three years ago, to run the clinic. At the start, he says, the center set up guidelines for determining what treatment symptoms would merit to prevent the insurer from seeking to influence treatment. "Lawyers support overtreatment, insurers support undertreatment. We're in the middle, with our evidence-based process as a robust arbiter," he says.

Dr. Strudley says that the clinic's treatment protocol, which was established following studies by the University of Manchester and Dr. Foster Ltd., a U.K. health-care research group, avoids many of the techniques commonly used for whiplash and soft-tissue-injury victims, including manipulation, ultrasound and acupuncture. Instead, it focuses on teaching patients remedial exercises that allow them to overcome the pain, and fear of pain, commonly associated with such conditions. "We focus more on self-reliance and on teaching (patients) to do it themselves," he says.

American insurers say they would face major hurdles in trying to follow Aviva in setting up their own medical services. One problem, says Greg Gaughan, associate vice president of claims for Nationwide Mutual Insurance Company of Columbus, Ohio, is that each state has its own regulations governing insurance and medical issues, making it impossible for U.S. insurers to adopt a single coordinated approach across the country to handling injury claims. Another obstacle would be the prospect of facing medical-malpractice suits, which are far more prevalent in the U.S. than Europe, says Robert Hartwig, chief economist of the U.S. Insurance Information Institute, a trade organization.

U.S. insurers would, however, relish being able to better control medical expenses, and in some cases, have filed lawsuits against clinics for what they consider excessive claims.

"Rising medical costs are the principle driver behind higher auto insurance prices in the U.S. and a significant share of that pressure is due to abuse and in some cases outright fraud," Mr. Hartwig says. A 2004 study by the Insurance Research Council, a nonprofit group supported by insurance companies, found that 12 percent to 18 percent of injury claims by victims of auto accidents in the U.S. are exaggerated and that, in New York City, 22 percent of claims are exaggerated, he says.