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Government’s whiplash reforms are an own goal



Clive Thomas, Managing Partner of Watkins and Gunn, comments on the Government’s recent announcement on whiplash claims.


The Government has announced Part one of their response to reforming the whiplash claims process. They intend raising the small claims limit for road traffic accident injury cases from £1,000 to £5,000 and raising it to £2,000 for all other types of injury claim. It hopes to introduce these reforms as soon as October 2018.


In addition they intend -

•              introducing fixed tariffs to cap the amount of damages for compensation claims.

•              Banning on offers to settle claims without providing medical evidence.


It does represent a slight retreat from the original proposal to increase the small claims limit to £5,000 for all types of injury claim.


The stated intention of the reforms is to get a "grip" on compensation claims and reduce insurance premiums for motorists, by what they hope will be £40 per year - even though the reforms made to date have produced no such savings. However, many believe that their reforms are a missed opportunity and an own goal.


The Government appear to have fixated on the amount of damages an accident victim can claim, and have failed to introduce a ban on cold calling or texting, which is so prevalent in the claims industry, or to plan to properly regulate claims management companies. Solicitors are, rightly, banned from making cold calls and sending nuisance text messages but claims management companies are not. The Small Claims Court is designed for consumer disputes and for people to represent themselves and, as a result, only very limited legal costs can be awarded. However, the proposed increase creates such an inequality of arms, between an accident victim and a large insurance company and their skilled lawyers that many people will simply not want, or be capable of, dealing with a claim without assistance. Claims management companies see this as a real opportunity to get even more involved. As a result it is feared that far from getting a "grip" they may in fact have fuelled the claims industry. They have also failed to address expensive motor repairs and repeated hikes in insurance premium tax, which are both major factors in the cost of motor insurance premiums.


APIL (the Association of Personal Injury Lawyers) predict that there will be an "explosion" in unsolicited calls and texts from claims management companies encouraging people to make claims - even potentially fraudulent ones.


Added to that is that the fixed tariff system of compensation will result in innocent accident victims being squeezed on both sides. On one hand being under compensated for their claims and then, to add insult to their injuries, having to pay a percentage of their already reduced compensation to a claims management company, if they are tempted to use one (or a lawyer if they decide to seek professional assistance).


So there is considerable concern that the changes may actually increase claims and insurance premiums, whilst reducing the rights and compensation for innocent accident victims. The reforms will require primary legislation as well as secondary. The Government intend it will form part of the Prisons and Courts Bill and they hope to implement the changes as from 1st October 2018.


This article is for general information purposes only and does not constitute legal or professional advice. For more information contact Watkins & Gunn Solicitors on 01633 262122 or visit to our website www.watkinsandgunn.co.uk






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