The future changes to low-value soft tissue personal injury claims (whiplash accident claims) have been well documented throughout 2016 ever since the Former Chancellor, George Osborne announced his proposals in the Autumn Statement 2015.
However, the Ministry of Justice have not yet formally announced their final proposals that will be put into place in the next few years.
The Government is keen to introduce stricter regulations in England and Wales to “disincentivise minor, exaggerated and fraudulent road traffic accident soft tissue injury claims”. This is a key area for reform for the Government as car insurance premiums continue to rise. This is happening even though the number of claims for personal injury compensation is now 50% higher than it was back in 2006, despite the UK having some of the safest roads in the world. The Government estimates that by introducing reforms, car insurance could be cut by around £40-£50 per year per policy. This is based on the assurances from UK insurance companies that the savings made from a reduction in compensation claims will be passed directly onto their customers.
The most recent headline makes for uneasy reading for Claimants who suffered injuries as a result of a road traffic accident. However, the facts and figures that the Government were relying upon when they drafted their initial proposals were out of date and failed to take consideration of the recent reforms that have taken place. These changes include, the introduction of MedCo reporting, the establishment and continual improvement of the Portal system and the improved relationship between Claimant Lawyers and Third Party Insurance companies in an effort to detect fraudulent claims.
In addition, although the insurance companies have vowed to pass on savings, previous reforms in the claims process have failed to see the premiums for their customers be reduced. In any event, if the insurance companies decide to not reduce their premiums, the Government has stated very clearly that they do not intend to intervene.
This is evident in that the statistics for 2010/2011 show that claims for whiplash injuries have fallen by more than 1/3 on previous years: yet still insurance companies are allowing the premiums for customers to keep rising.
To put these proposals into perspective, the average compensation pay-out for soft tissue injuries is approximately £1,850, however the initial consultation proposes injuries that last between 6-9 months would be cut and would only receive fixed damages of £400 + £25 for their psychological trauma, while more severe injuries that last between 19-24 months will be subject to a £3,600 tariff. However, unhelpfully these figures have been calculated based on the Judicial Studies Guidelines of 2015 and therefore were out of date and have since been increased.
The right to claim for compensation following a wrongdoing has been allowed by law for over 130 years and was reaffirmed by Lord Hope in 2007 when he stated “every wrong, however slight, attracts a remedy…” He made it clear in his speech in the House of Lords that “any damages that are paid out are there for injuries that have caused harm” and therefore holds the wrongdoer to account.
Any confirmed reforms will be eagerly followed by our team and further updates will be available in the future.