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Proposed Changes To Personal Injury Law

01st August 2016

In last autumn’s budget the then Chancellor, George Osborne, proposed a series of changes affecting claims for personal injury. He proposed increasing what is called the ‘small claims track’ limit (SCT) and further proposed scrapping a person’s entitlement to claim compensation for ‘minor’ soft tissue injuries. ‘Minor’ has still not been defined. The SCT limit relates to the value of a person’s claim for injury compensation. If the amount is above the current limit of £1,000 then a claimant’s legal costs can be recovered, in part, from the at fault party’s insurer. The Chancellor proposed increasing this limit to £5,000. This in effect would capture 80% of all personal injury claims. It would likely lead to claimant’s having to face the might of the wealthy insurers alone without expert help or guidance. In practice many simply would not bother, leaving insurers with a windfall.

For some years insurers have enjoyed the ear of Government and have been successful in effecting a series of law and rule changes which have limited the cost of personal injury claims and, ergo, increased insurers’ profits. Further changes are now proposed which, if carried, could result in the majority of injured claimants receiving no compensation for personal injury.

The proposed changes would impact upon the economy too. Currently insurers have to repay to the State the Statutory Sick Pay (SSP) received by injured claimants who have been unable to work. If there are no claims then there is no SSP repayment. Insurers also pay to rehabilitate privately most injured claimants. That would fall to the already stretched NHS.

Insurers argue that personal injury claims involve and promote high levels of fraud. However insurers’ own recent studies have demonstrated clearly that this is untrue. Some insurers continue to make offers to settle injury claims without requiring any medical evidence to prove the injury. Fraudsters know this and target the insurers. Simply banning what are called ‘pre-medical’ offers and requiring evidence in support of all injuries would address this issue. An effective ban on bringing most personal injury claims, the vast majority of which are wholly genuine, is entirely the wrong approach. It is, however, the approach most favoured by the insurers, perhaps for obvious reasons.

The personal injury sector has undergone significant change over the past few years. There has not been time for these changes to take effect. Government should monitor these changes and learn from them before kowtowing to pressure from big business, at the considerable expense of the innocent majority of accident victims.

Paul Lewis. Partner and Head of Accident Management

General, George Ide, Personal Injury Blog
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