The government has confirmed that its long-awaited whiplash reforms are due to come into force in May 2021, having been delayed several times, partly as a result of the COVID-19 pandemic.
The Whiplash Reform Programme was developed by the Ministry of Justice as part of the Civil Liabilities Act 2018. It introduces a number of changes to legislation and reforms the way that whiplash and other low-value road traffic accident (RTA) personal injury claims are made. This will mean significant changes, both for personal injury claimants and, more importantly, for claimants.
The major reforms include:
- Rise in small claims track limit – The lower limit for recovering legal costs for personal injury claims through the Small Claims Court will be raised from £1,000 to £5,000. In practice, this means RTA claimants will have to pay their own costs if the value of the claim is below the new threshold.
- New fixed tariff – Fixed compensation for injuries that are designated as whiplash injuries, according to the duration of the injury ranging from 0-24 months. The new amount of recoverable compensation will be significantly lower, possibly as much as up to 10 times lower.
- Mandatory medical evidence – A ban on settling whiplash claims without medical evidence. This is designed to eliminate the contentious practice adopted by many insurance companies of making claimants “pre-med” offers in an effort to tempt injured RTA claimants into ‘taking the money’ without the claimant realising the full extent of their injuries. This practice promotes fraudulent claims.
- New online whiplash portal – RTA whiplash claimants will be able to pursue their own claims, up to the new limit of £5,000, against the insurers of the driver who was at fault. This will be done through a new portal, which will sit alongside the one currently used predominantly by solicitors, and can be found at Official Injury Claim.
There are significant concerns around the implementation of the new reforms and what this will mean for victims of road traffic accidents. Claimants for injuries valued at less than £5,000 will have far less access to the specialist support and advice of a solicitor. Not only could this see their access to justice and compensation limited, the complex process of submitting a personal injury claim without professional assistance stands in stark contrast to insurance companies’ extensive legal experience in dealing with personal injury claims.
Solicitors and claimant bodies such as the Motor Accident Solicitors Society are very concerned that, without the specialist eye of a solicitor, insurers will deny liability in an increasing number of cases, leaving claimant to consider whether they wish to take on the might of the insurer in court. How many claimants will have the capacity and confidence to do so? Many will simply give up. The Government initially proposed an arbitration scheme to protect against such poor behaviour but, over the past 12-18 months, has rowed back from this and an arbitration scheme is not part of the legislation being implemented in May 2021.
One of the major aims of the new whiplash reforms is to crack down on fraudulent claims for compensation and make it more difficult for dishonest motorists or cash-hungry whiplash victims to make lucrative claims. However, Government has chosen to address this by significantly reducing access to justice for all, rather than addressing the relatively small overall percentage of fraudulent claims in the system. They are doing so despite vociferous objections and concerns from those representing claimants.
According to the Ministry of Justice, another potential benefit of the whiplash reforms will be that ordinary motorists could see a reduction in their car insurance premiums. It will achieve this by tackling the ‘high number and cost’ of whiplash claims. However, following previous reforms almost a decade ago, insurers promised, and failed, to reduce premiums for motorists. There is scepticism that premiums will reduce this time, with claimant groups anticipating other reason why premiums remain high whilst insurer profits boom.
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Raising the small claims track limit will mean that fewer victims of whiplash injuries and RTAs will be able to access the help of personal injury solicitors. The creation of the new portal is designed to provide fair opportunities to anyone injured in an RTA to make a claim, if they wish to do so, but it’s success will depend upon claimants’ willingness to sue it and insurers playing fair and honest with those claims.
If you would like to learn more about the upcoming whiplash reforms and how they might affect you, please get in contact with the experienced team at George Ide today.
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