|Update [20/04/2017]: The Prison and Courts Bill, upon which these whiplash reforms were based, has been scrapped. This means that the proposed changes outlined in this article are no longer under consideration. However, it’s likely that the same proposals, or similar proposals, may be reintroduced by the new government after July’s general election.|
The government have put forward a proposal to change the legislation surrounding whiplash claims, including a proposal that you will no longer be able to claim any meaningful compensation for general damages, and you will cease to be able to recoup solicitor fees for any claim under £5,000.
Instead, compensation will only be granted for injury on a tariff based system and specific losses, such as medical bills, property damage (such as your car) or loss of income for being out of work due to the injury. The proposed changes were presented to the government by the ABI (Association of British Insurers), who argued that they will help reduce the amount of fraudulent personal injury claims and help eradicate what they see as a compensation culture.
Upon the announcement of the proposed changes, there was a lot of criticism from both legal professionals and the general public. 6000 people wrote to Justice Secretary Elizabeth Truss to express their concerns.
The primary cause for concern, which legal practitioners have warned against, is a situation in which people are more likely to pursue their compensation claims alone, as they feel they can no longer afford legal support. Under the new system, if a claim falls under £5,000, the claimant will no longer be able to recoup a solicitor’s fees from the insurance company who is the defendant. Instead, any legal fees will come out of their compensation.
With little or no legal experience, individuals representing themselves in the small claims court may not receive as much compensation as they deserve, or as much as they would receive with professional representation.
Aside from the ramifications these changes would have both on claimants and lawyers, the Association of Personal Injury Lawyers (APIL) have questioned the validity of the statistics which form the basis for these changes. APIL also don’t believe these changes would reduce the amount of fraudulent claims.
Capital Economics, in association with Access to Justice, conducted their own research to assess the validity of ABI’s findings. While it’s commonly suggested that motor accident rates have fallen, but personal injury claims have risen, giving rise to a compensation culture, Capital Economics’ findings suggest this is false. Instead, their data shows that rather than fewer motor accidents occurring, there’s simply a reduction in the amount being reported, because of less traffic police.
Lawyers who specialise in small claims will no longer receive a sustainable amount of work in low-value claims, which will force many to either re-specialise or change industries entirely. Capital Economics have predicted that the impact this will have on law firms in the UK will be substantial, with one in four law firms relying on small claims cases to remain in business.
While ABI places the blame of the recent 14pc increase in insurance premiums on fraudulent personal injury claims, Capital Economics suggests it’s more likely to be the result of the recent financial crisis.
If these changes do come into effect, our advice to anyone who is considering a claim for compensation after a whiplash injury is to still seek legal representation, regardless of whether the claim falls below £5,000. Having a professional means you’re more likely to get the full compensation you deserve, and often even after the legal fees have been deducted from your total, you may still receive more compensation than if you were to represent yourself.