Ministry of Justice 'set aside' whiplash reforms

Yesterday, The Times newspaper reported that whiplash reforms, proposed in the Autumn Statement last year, have been set aside. While insurers are frustrated by the decision, campaigners have welcomed the news.

What are the reforms?

The Government wish to tackle fraud and the compensation culture in personal injury claims.  The proposed whiplash reforms would see the small claims limit increase from £1,000 to £5,000.  In addition, the right to claim for low-value, minor whiplash injuries, would also be removed.

Insurance companies allege that the reforms would create an average saving of £40-£50 per motor insurance policy and these savings would be passed directly onto customers.

Former Chancellor of the Exchequer, George Osborne, announced in his 2015 Autumn Statement that the Government intend to press on with further whiplash reforms.

The whiplash reforms will remove the right for ordinary citizens to recover compensation for minor soft tissue injuries.

In light of the news report in The Times newspaper, the halt on the whiplash reforms is good news for anyone who has suffered minor soft tissue injuries as a result of an accident.

Criticism of the reforms

The reforms have been criticised for ignoring ‘root problems’ of PI claims, namely cold calling and the behaviour of claims management companies. The shadow Justice Minister, Andy Slaughter, accused the reforms of using whiplash “as a front for further restrictions in the provision of legal advice in road traffic accident claims”.

There have also been concerns that any insurance savings in personal injury claims won’t actually mean lower insurance premiums. Insurers have been accused of not passing on savings after previous reforms

Campaign

The Association of Personal Injury Lawyers (“APIL”) have campaigned against these reforms and released this statement in light of the news:

“Reports in The Times that the Government has ‘set aside’ whiplash reforms have been welcomed by the Association of Personal Injury Lawyers (APIL).

“When news emerged in the summer that insurers had failed to pass on savings from previous personal injury reforms to motorists, it was clear that the proposed reforms were aiming at the wrong target,” said APIL president, Neil Sugarman.

“Car insurance premiums continue to rise while costs to insurers from personal injury claims are falling. It’s now time for the Government to investigate the real reasons for rising premiums and hold the insurance industry to account.

“But there is no room for complacency,” he cautioned. “We will continue to argue that any reforms to the personal injury claims process must be based on independent evidence, rather than insurance industry rhetoric.””

If you have any concerns as to how these reforms may affect you, please contact our Personal Injury department on 01775 764150.