In his Autumn statement, the then Chancellor, George Osborne reiterated the Government’s pledge to tackle the number and cost of whiplash claims which according to Government’s own figures are 50% higher than a decade ago with the rise attributed to “ a predatory claims industry”
However, In October 2016 the Government announced that it was to shelve the proposed reforms, this was confirmed in an email to members of the Association of British Insurers (ABI) from James Dalton, its director of general insurance policy which said “the Secretary of State has decided she does not want to proceed with the reforms at the moment”
Notwithstanding, a subsequent statement from the Ministry of Justice (MoJ) indicated that the issue was not in fact off the agenda and that the Government remained committed to reform.
In November 2016 the Government announced that they were to press ahead with the reforms and published its consultation paper – Reforming the Soft Tissue Injury (Whiplash) Claims Process.
They further announced a consultation period of just 50 days (including Christmas holidays) ending on 6th January 2017.
Campaigners against reforms of the personal injury sector have appealed for more time to present their case. The Access to Justice (A2J) group says running the consultation over the Christmas and New Year period will limit people’s ability to submit full responses. A2J has written to the Ministry of Justice asking for a 12 week consultation, citing the government’s own code of practice which states that timescales can be flexible depending on the issue at stake.
Personal Injury Lawyers accept the need for some reforms but condemn the ‘excessive’ reforms criticising the MoJ’s ‘blunt instrument’ approach as ‘a license for fat cat insurers to print cash’.
The proposed changes appear to be nothing less than an early Christmas gift for the Insurers and although they have pledged to pass on £1bn of savings to the motorist, the equivalent of a life changing £40 against the premium, (is there no limit to their benevolence?) we should be wise to remember their failure to pass on over £500m to drivers following the introduction of the RTA portal.
The Key measures of the reforms are:
• Reduce or scrap damages for minor soft tissue injury claims, minor injuries would be classed as lasting up to six or nine months. Clearly a legitimate injury lasting even just six months could still have a huge impact on ones quality of life. For this level of injury it is proposed that damages would be limited to a mere £400.00. However if the accident has a psychological impact on the claimant they can expect a further bonus of £25.00. What if the physical injury lasts only 6 months but the psychological injury lasts longer, treatment of stress, anxiety or even PTSD should not have a time limit imposed by a non-qualified claims handler.
• It is further proposed that damages for injuries lasting longer than six or nine months be graded and fixed according to duration. Injuries lasting 19 – 24 months will be subject to a limit of £3,600.00.
• The small claims limit to rise to at least £5,000.00 although a figure above this cannot be ruled out. This proposal is likely to be applied to all PI claims and not limited solely to RTA.
• Pre-medical offers to be banned on the basis that they promote fraudulent claims.
The following points, far from being exhaustive, immediately come to mind:
The principle that litigants should be on an equal footing .
The author/s of these proposals appears to have adopted the position that all claims for personal injury are either exaggerated or fraudulent unless proven otherwise.
As of yet, there is no clear distinction between RTA and Pl/El claims, Why?
By raising the small claims limit to even £5000.00 may remove 75% of the claims from the costs liability of the insurer, but does nothing to assist the honest ‘Joe’ in true access to justice.
There will be a substantial increase in Litigants in Person, and yet the principle that litigants should be on an equal footing will be thrown out with the ‘bath water’.
The proposals as they stand will have a decimating effect of the legal community, it will survive by the transfer of the funding liability from the insurer to the claimant, who will have to pay for his legal representation out of any award.
The reforms will give insurers ‘carte blanche’ to dispute all low value claims in the knowledge that even if they eventually lose, the case still falls within the SCL and as such they incur no costs liability.
The impact of the proposed changes is far reaching. The opponents of these proposals cannot be dismissed as merely a self interest lobby, they have raised legitimate concerns that need to be addressed. Furthermore the proponents of the ‘myth of a compensation culture’ should provide the definitive proof that it actually exists rather than some blurred snapshot of some obscure data extracted by an equally obscure mandarin.