Whiplash Reforms: What Could They Mean For Motorists?
The Law Of... defending the public's access to justiceAfter previously putting the brakes on plans to reform whiplash claims, the Ministry of Justice (MoJ) have stated that they will be pushing on with plans to overhaul the Personal Injury industry, hinting at many of the proposals first tabled by then Chancellor George Osborne during an Autumn Statement.
With the Government using carefully selected data, supplied by the insurance industry, to justify the need for reform, Rose Gibson – Partner in Personal Injury
at Simpson Millar – explains the true cost of the proposed reforms, and how they could remove the right to justice for motorists across the country.
Why Are Reforms Being Considered?
The insurance industry has been lobbying successive governments to try and reduce the cost associated with whiplash claims.
It has repeatedly been claimed that whiplash claims are somehow false, or fraudulent, as soft tissue damage
is unlike other injuries in that it cannot be viewed under an x-ray.
In 2012, the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO)
looked to crackdown on whiplash claims and completely changed the landscape of the Personal Injury industry; however it seems that these reforms did not go far enough and now plans are being tabled to once again restrict claimants from accessing rightful compensation.
During his tenure as Chancellor, George Osborne announced a number of reforms to the Personal Injury industry, including:
Publishing a new consultation
- Banning any claims for soft tissue damage, and,
- Raising the limit for cases to be heard by the Small Claims Court from £1,000 to £5,000 – meaning claimants would have to fund their own legal action for claims up to £5,000, as legal costs would not be covered by the side at fault
on the soft tissue claims process, the MoJ are considering a number of plans that would affect motorists, including putting a cap on, or scrapping altogether, whiplash claims and raising the small claims limit for all personal injury claims to £5,000.
Despite the combative language used by the Government and the insurance industry when tabling these proposals – who referred to personal injury firms as 'predatory'
– personal injury solicitors continue to be open to a collaborative approach, so that we can tackle fraudulent claims together; unfortunately it appears that lobbying has once again beaten open discussions.
Is There A Compensation Culture In The UK?
It is claimed that the UK is in the grips of a compensation culture, with allegations that we are the whiplash capital of the world.
Despite these claims, statistics show that this is not the case. The Government's own data has shown that motoring cases registered to the Compensation Recovery Unit is generally on a downward trajectory
, with LASPO reforms decreasing the amount of whiplash claims by almost 19%
The insurance industry has pointed to the fact that the number of soft tissue claims has increased 50% over the last decade, but this could linked to an improved awareness amongst the public regarding their rights to claim in an internet age, where they have a wealth of supporting information at their fingertips.
There is no way to prove that an increase in whiplash claim is linked to exaggerated or fraudulent claims.
It is important to remember that last year, just 2.5% of motorists – 770,000 out of 30 million – filed claims, which does not highlight a culture of false claims and compensation hungry motorists.
Ultimately, those who receive compensation after the negligent driving of others are being painted to be claiming unfairly but in reality most cases feature real people who need to undergo treatment, pay for costly medicine, and quite often lose earnings through time missed at work.
Won't This Result In Cheaper Insurance Premiums?
As a way to get members of public on board with proposed changes, insurers claim that the costs they incur paying for whiplash claims directly affect everyday premiums, as they look to recover their costs by spreading the bill amongst their customers.
The government's recent consultation has claimed that motorists could save £40 on their premiums if the whiplash claims were reduced, as multiple insurers have promised to passing on any savings they make to consumers, a commitment that cannot be enforced.
Once again, this argument does not stand up to statistical scrutiny, as the car insurance price index shows that prices today are around the same as they were before the LASPO reforms
, which caused a 19% reduction in whiplash claims.
We also need to consider the effect that 2.5% of motorists are having on the premiums of the other 97.5% who have not made a whiplash claims – it does not seem likely that banning the claims of this tiny proportion of motorists will have a significant effect on the overwhelming majority of motorists.
What Are The Other Possible Effects Of Reforms?
The most concerning matter surrounding these proposed changes is that, despite the claim that they focus on road traffic collisions, they could affect the entire personal injury industry.
We saw a similar consequence of the LASPO reforms, which were supposed to focus on fraudulent claims but ended up restricting legal aid across the board and removed many people's ability to claim compensation when they were injured through no fault of their own.
These proposals are for all soft tissue injuries, and while the consultations focus on accidents on the road, it is important to note that soft tissue damage can be sustained anywhere – so these changes could affect a claimant's ability to receive compensation for a fall at work, for example.
People often dismiss the impact a soft tissue injury can have on someone’s life, and quite how disruptive these injuries can be.
People write off back and neck pain all too frequently, often forgetting what limitation of movement can do to the quality of someone’s life, even temporarily.
Those considering restricting claimant's access to justice probably do not realise what it means to lose a few thousand pounds in earnings as a result of a seemingly minor collision; it can have a devastating effect. I have known some people on low incomes nearly lose their homes because of a disruption to their working lives for a matter of weeks; there are some people that have lost their jobs after an accident, due to the time they were absent during their recovery – in both instances debt becomes an issue and we are not able to recover these costs for clients.