Today – 6 January 2017 – marks the closure of the government’s consultation into proposed reforms for the soft tissue injury (whiplash) claims process. A legislative reform package shelved in 2015, it was resurrected in November 2016 with a consultation period of less than two months. If implemented, the proposals would undoubtedly have a huge impact on personal injury law. And whilst practitioners and law firms have much to lose, it is the legitimate victims of road traffic accidents who will be hit hardest. I have responded to this loaded “consultation”.
The proposals include:
- Completely removing compensation for ‘pain, suffering and loss of amenity’ (essentially the injury part of a personal injury claim) for soft-tissue injuries sustained in a road traffic accident where symptoms last no more than 6 months.
Other suggestions surrounding this proposal include:
– Increasing the above threshold to 9 months instead of 6; and/or
– Imposing a system of fixed compensation ‘tariffs’ instead of a complete abolition, whereby an injury now valued between £1,705 to £3,520 (according to current judicial guidelines) would be worth £700 – or £740 if you are unfortunate enough to have suffered psychological injury as well.
- Applying the above tariff system to soft-tissue injuries from road traffic accidents when injuries last longer than the 6 or 9 month threshold.
- Increasing the small-claims track to £5,000 for all personal injury claims. This would therefore include accidents at work and public liability cases, in addition to road traffic accidents. Currently, cases worth less than £1,000 fall into the small-claims track. Legal fees are not recoverable in such cases and so this proposal would essentially deny legal representation to a large proportion of potential claimants.
This is the knife-edge upon which the personal injury industry now stands. But whilst the government wields the knife, it is the insurance industry that handed it to them. The proposals are unashamedly pro-insurer, with the consultation document proudly proclaiming:
“The reform package announced in this consultation will save the [insurance] industry around £1bn a year, which will be passed on to consumers through reduced motor insurance premiums. Millions of motorists could save an average of £40 on their annual car insurance from these proposals to tackle the unacceptable number of claims.”
There are several questionable aspects to this statement. Firstly, it is difficult to see how increasing the small-claims track to £5,000 for non-road traffic accidents will help motorists with reducing car insurance premiums. Secondly, far from an increasing number of claims, figures from the Department of Work and Pension’s compensation recovery unit show a decline in numbers of registered claims. From a high of 1,049,017 cases in 2013/14, to 981,324 in 2015/16, and “latest figures show another drop, with 963,771 settlements [in 2016]” [source]
Finally, and perhaps most damning of all, is the insurance industry’s past record of passing its savings on to its customers. To quote Andrew Mckie’s excellent open letter to Chris Green MP:
“The insurance industry’s own Association of British Insurers (ABI) figures show that their costs of recompensing those hurt by their policy holders have fallen 29% since 2010. The amount paid out annually by motor insurers fell from £8.3 billion to £5.89 billion last year – a decrease of £2.41 billion. Yet savings from this multi-billion pound windfall have not been passed on.”
The possibility of consumers benefiting is perhaps made even more unlikely by a further increase in Insurance Premium Tax which is due to rise to 12% in June 2017.
However if, for arguments sake, motor insurance premiums were to be reduced as a result of these proposals, it would be interesting to see which situation motorists would prefer. Would it be: greater legal protection should you become involved in a road traffic accident through no fault of your own, or a slight reduction in your premiums? As Qamar Anwar neatly puts it, “the idea of saving £40 on my car insurance is not that attractive if I can’t work or get the specialist medical attention I need when I need it.”
This brings me to what I see as the worst failing of the proposed reforms: there is no acknowledgement of the innocent, genuinely injured people that will be affected. Their access to justice, their ability to bring a claim for legitimate compensation, and their opportunity to fight for a reasonable settlement, will all be hamstrung by the proposals. It appears they will be left with two unattractive options: to bring a claim themselves, or to abandon the pursuit of their legal rights. The former option will mean acting without qualified legal representation and going up against insurance companies with the resources to obtain solicitors and barristers. The other option will mean looking to their own financial resources to cover treatment fees, medication, lost earnings, and any other loss the injury may cause them.
It is important to remember that the law recognises the right for people to be compensated for the pain and suffering from injuries caused by negligence. It also recognises rights to legal representation. These proposed reforms are quite willing to ignore those rights.
In fairness, the proposals also state their aim to crack down on fraudulent claims and this is a laudable goal. As is putting an end to practises which serve only to debase the personal injury sector, such as cold-calling and sending unsolicited text messages about mythical accidents. But surely a more nuanced approach to tackling these issues is possible? Removing qualified legal practitioners from vast swathes of the personal injury sector serves to prejudice those with a legitimate need for compensation, whilst at the same time removing the vital safeguards those same practitioners provide. Who has the greater chance of presenting a fraudulent claim: the litigant in person or the client of a regulated legal practitioner?
Time will tell how much the government will be influenced by the numerous concerns raised against these proposals. If they are implemented, however, I believe it will represent an unfortunate step back for justice.