Motorists who suffer soft tissue injuries in road traffic accidents will be hit by new government reform that will severely hamper their ability to claim for compensation.
From October 2018, the small claims limit will increase to £5,000 for RTA-related personal injury claims thanks to government reform. The MOJ will also increase the small claims limit from £1,000 to £2000. This will include all injury types and not just those brought by road traffic accident claims.
Even worse, the MOJ are introducing a tariff system offering a “one size fits all” method of resolving soft tissue claims. The terms of the tariff are very paltry indeed and revolve around the victim’s recovery time, instead of their injury.
It’s not all bad news though, as the government are finally banning the settlement of whiplash claims without medical evidence. This will bring an end to a long standing insurer tactic of making pre-med offers to claimants. Something the personal injury sector has been campaigning for, for a long time.
So how will these reforms affect you, the UK motorist and potential personal injury claimant, moving forward?
On the whole, these reforms will punish victims of personal injury. No win no fee agreements will become untenable, meaning personal injury solicitors will have to charge a fee for their services regardless of outcome. This will likely deter many victims from pursuing their right to claim, as there is now a risk in doing so.
The tariff system does not take into account the context of a personal injury. It surrounds the period of recovery instead. Therefore it fails to properly take into account the consequences for a victim.
For example, if an injury requires a three month recovery time, you would usually need time off work. On top of this, you would face restrictions to your normal lifestyle, including inability to participate in leisure activities. You may also miss out on enjoying quality time with your family. Then, of course, there are the medical bills and prescriptions costs to take into account. With all that in mind, you would stand to receive just £255 under the new tariff system.
Scott Rees and Co Marketing Partner, David Byrne, is critical of the new tariff system, saying:
“This system is completely unfair and stands to leave genuine accident victims out of pocket. You can currently receive double the compensation amount for a flight delay of four hours as you can for suffering a personal injury in a road traffic accident.”
“These reforms are going to punish claimants for seemingly no other reason that to cut costs. The Government keep pedalling this compensation culture, but their own figures have proven this to be a myth in the past.
“LASPO was introduced to combat soft tissue claims and whiplash claims were already down. With LASPO working so well, you have to question why there is a need for further reform?”
No reduction in premiums
The Justice Minister, Sir Oliver Heald has been quick to assert that the motivation was to tackle rising insurance premiums, saying:
“So we are cracking down on minor, exaggerated and fraudulent whiplash claims. And we expect insurers to fulfil their promise and put the money saved back in the pockets of the country’s drivers”
The MOJ are saying that it expects car insurance premiums to come down by around by £40 a year. The problem here is that this is the same promise made pre-LASPO and yet premiums continue to rise. This is despite a drop in soft tissue claims. So even if they were to implement the reductions, the saving would be nullified within a year.
David Byrne shares the concerns of those who sceptical on this explanation, saying:
“Motorists are now at the mercy of their insurers choosing whether or not to reduce the cost of policies. The ABI head, James Dalton, can only name AVIVA in regards to insurers pledging to put savings back into premiums. No other insurer has made the same pledge. So it is clear to see we cannot trust the insurers to fulfil this commitment. The only real winners from these reforms are the insurers and it is ridiculous that the government can’t see this.”
Indeed, David is not the only person who is sceptical about the motivations for the decision. Many other personal injury representatives are raising their concerns over the announcement, including APIL and the Law Society.
APIL (Association of Personal Injury Lawyers) President, Neil Sugarman, is also critical about the reforms, saying:
“Expensive motor repairs and repeated hikes in insurance premium tax are both major factors in the cost of motor premiums, yet the government is fanatical about suppressing the right to claim for legitimate injuries instead”
The Law Society are also voicing their concerns, with a spokesperson saying:
“The government is treating injuries that would be regarded as grievous bodily harm in the criminal courts as small claims. A limit of £5,000 will mean injuries including facial scarring, fractured ribs, a bruised chest and whiplash to the neck would be considered as “small claims”. This means people will be forced to bring claims themselves without expert legal advice.”
“The Ministry of Justice does not appear to have properly considered the fact that this will clog up the court system creating a David and Goliath situation where people recovering from their injuries, deprived of legal advice, have no choice but to act for themselves.”
Continuing the fight
The government are expecting to implement the reforms in full on the 1st October 2018.. Despite the impending restrictions, Scott Rees & Co vows to continue doing everything possible to assist those who are injured.
“We wholeheartedly oppose any obstruction of justice to those in need of legal assistance. Should opportunities present themselves to have further input to look for alternatives then we will certainly do all we can.
These new reforms will see many genuine accident victims coming up short for their injuries. They also threaten the stability to an entire profession. It is clear to everyone except the government that only the insurers stand to gain from these reforms.”
Scott Rees and Co are supporters of the not-for-profit Access to Justice group. We have been representing personal injury victims for 25 years, particularly for road traffic accidents. It is our intention to fight these reforms so that we can continue to help personal injury victims moving forward.
Visit our website for more information about personal injury claims. If you feel that you have a claim, call us today on 01695 722222. Furthermore you can fill in our call back form and we will call you.