General Insurance Article - Parliament returns to debate whiplash reform


Campaigners have called for the government to step back from the brink or risk passing bad law. MPs will debate the government’s whiplash reforms on Parliament’s first day back from the Summer Recess on 4 September, but Andrew Twambley, spokesperson for Access to Justice (A2J), says genuinely injured people risk having their rights removed for nothing.

 “The government’s proposals will create confusion and unfairness, and the losers will be genuinely injured people,” he said. He explained that victims of road traffic accidents (RTA) will lose up to 75% of compensation for their injuries, and will not be able to call on legal help if they wish to fight their case in Court, unless they pay for a lawyer out of their own pocket.

 If the proposals became law:
 A 12-year-old passenger in a car who receives severe bruising and/or whiplash injuries from an RTA that wasn’t the driver’s fault, would see their compensation fall from £2,000 for a three-month injury to £235.
  
 If Mr A was injured in a non-fault RTA he would be entitled to £3,500 for a neck injury lasting 24 months, and would be unable to recoup the costs of using a lawyer. If Mr B had exactly the same injury at work, he would be entitled to £6,500 following a non-RTA accident and would be able to recoup his legal costs.
  
 A pedestrian or a cyclist, injured in an RTA that wasn’t their fault will have to pay for a lawyer if the claim is below £5,000 and they need to contest their case in the Courts. At the moment, the at-fault insurer pays.”
  
 Mr Twambley said: “No wonder giant insurers are lobbying hard for the government to pass this flawed policy into law. Insurers will increase their profits by up to £600m annually because they won’t have to pay for the costs of legal advice for non-fault accident victims.”

 Mr Twambley said that new analysis of the government’s own claims data showed that, based on current trends, by 2020 there will 40% fewer accident claims than 2015, when the reforms were first announced.

 “The government’s earlier reforms have been wholly successful in driving down claims, so why are ministers persisting with a reform that punishes genuine claimants and creates massive confusion? The beneficiaries will be insurers, and claims touts looking to make a fast buck by filling the void left by legal firms.”

 Mr Twambley said all personal injury claims should be treated the same for compensation purposes. “A broken collarbone is the same injury, whether the accident occurred after falling off a ladder at work or in a motor car, yet the government plans to treat car-related broken collarbones differently to work-related broken collarbones. That’s crazy.”

 Mr Twambley said that support was building among MPs for a compromise package, which balanced the rights of genuinely injured people with the need to stop frivolous claims.

 He added: “The Justice Select Committee has called for compromise, the Transport Select Committee has called for compromise, and the House of Lords has called for compromise. Other representative bodies – from Cycling UK to USDAW – have called for compromise.”

 “Meanwhile the MoJ stands shoulder to shoulder with insurance companies and the ABI, when it should be standing up for injured people.”

 Mr Twambley said that A2J’s compromise proposals shadowed much of the MoJ’s reform package, but the difference is a consistent £2000 small claims limit for all personal injuries.

 What A2J is calling for:
 A2J supports an inflationary small claims limit increase in line with the relevant recommendations of the Justice Select Committee. ‘The small claims limit for Personal Injury should only be increased to reflect inflation…and £1,500 might be appropriate.’ Vulnerable road users (VRUs), who don’t get whiplash injuries, should be removed from the scope of the reforms altogether.
  
 Tariff:
 We believe tariffs can have a place but only for the lowest value claims and with fair tariff numbers set independently of government, perhaps more in line with Judicial College Guidelines.
  
 Implementation:
 There must be safeguards in place to protect litigants in person (LiPs) before the new system is implemented. These safeguards should include:

 Reforms initially to apply only to RTA claims;
 A fully tested and functioning portal suitable for LiPs, ideally piloted before any wider launch;
 A properly functioning before the event (BTE) legal expenses insurance market;
 The Insurance Fraud Taskforce recommendations to be implemented

 The Government to complete its formal review of LASPO (Legal Aid, Sentencing and Punishment of Offenders) Act and publish the results  

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