Government announce significant reforms for personal injury claims

Posted Mar 22, 2018.
An announcement made by the Ministry of Justice (MOJ) earlier this week confirmed that the Government is still set on further, far reaching reforms affecting personal injury claims of all types that are likely to have a detrimental financial impact on claimants. The reforms, part of an overhauled Civil Liability Bill, will particularly affect claims for whiplash and also the discount rate calculation, which is the method used to calculate the level of compensation awarded in personal injury claims settlements.
 
The changes announced have been on the cards for a while across previous administrations, and it is clear that justice secretary David Gauke intends to proceed with implementation despite many insurers (who pay the vast majority of claims) recently announcing record profits. Gauke, who claims that motorists will save an average of £35 per year on their insurance premiums, said that

 “The number of whiplash claims has been too high for too long, and is symptomatic of a wider compensation culture…we are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday and that money can be put back in the pockets of millions of law-abiding motorists”

Amongst the changes announced, there will be new fixed amounts of compensation available for whiplash claims, together with a ban on such claims being settled without medical evidence being submitted. It is also likely that the fixed amounts of compensation will be significantly lower than at present - combined with an increase in the small claims limit from £1,000 to £5,000, this will effectively remove solicitors from the claims process as they will not be entitled to recover the costs of running such claims. The Law Society has expressed concerns that the proposals for whiplash in particular may significantly restrict the availability of professional legal advice for motorists. Society president Joe Egan said:

“This is a significant change to the present system where judges decide what compensation is to be awarded…there is a risk these new proposals will mean victims will receive far less than under current levels of compensation”

The reforms announced are likely to become law by April 2019.