The Ministry of Justice has recently issued a consultative document on reforming personal injury claims, with particular emphasis on RTA related soft tissue claims (whiplash). The deadline for responding is the 6 January 2017.
The consultation has been billed by the Government as an attempt to reduce fraud and cut car insurance premiums but its scope goes much further and will have far reaching implications for victims of all accidents.
The key measures are:
- To reduce or scrap damages altogether for “minor” RTA-related soft tissue injury claims. Minor injuries would be classed as lasting either up to six or nine months.
- Damages for injuries lasting longer than six or nine months should be graded and fixed according to duration. Minor injuries (of up to six months duration) would receive £400 damages, plus £25 for psychological impact. Injuries lasting 19-24 months will have a £3,600.00 tariff.
- The small claims limit for a personal injury will rise from £1,000.00 to at least £5,000.00. The government’s preferred option is to apply this limit to all personal injury claims. A figure above £5,000.00 is not ruled out. This is the only key measure that would not require primary legislation.
- A ban on all pre-medical offers to settle. The only question appears whether this should apply only to RTA claims, what exemptions there should be, and how it would be enforced.
The scope of the consultation is, however, much wider. Other issues being considered include:
- A mandatory requirement for referral sources to be included on the claims notification form.
- Amending the costs provisions so a claimant is required to seek the court’s permission to discontinue less than 28 days before trial.
- Requiring early notification of claims, taking inspiration from the Sweden model where claimants have 72 hours after their accident to seek and receive medical treatment.
- Reduce the costs of rehabilitation.
- Restrictions on the recoverability of disbursements, for example for medical reports.
These proposals (if fully implemented) would amount to a root and branch reform of the personal injury claims process. We are very concerned by the proposed increase to the small claims limit to cover all personal injury claims. This change could occur as early as April 2017.
What this means is successful Claimants will no longer be able to recover their lawyer’s fees if their case falls within the small claims limit. It is estimated that up to 90% of all personal injury cases will fall into this category. Without legal advice, Claimants must deal with the defendant’s insurer directly and so will be at their mercy. In our experience, those insurance companies do not always deal fairly with Claimants who represent themselves.
The plight of people injured by the negligence of others seems not to be a high priority of the government, who prefer instead to spend considerable time listening to the insurance industry and tackling what they label “the compensation culture” and “high number of fraudulent claims”.
The difficulty is that firstly, these changes would be eroding the long-established principle in English law that a claimant can recover their damages and legal costs if injured by another party and secondly, that the evidence that there are a high number of fraudulent personal injury claims (as opposed to other fraudulent insurance claims), is simply not there.