Today, the Ministry of Justice has made several announcements that strongly impact on the personal injury industry in an attempt to reduce the UK’s insurance premiums.
The unveiled plans will target false whiplash claims and also include confirmation of their intention to keep the small claims limit at £1000.
Initial reports indicate an industry-wide positive reaction to these announcements, particularly because statistics suggest that a large proportion of UK road traffic accident claims are exaggerated or fraudulent.
According to the Association of British Insurers, whiplash cases form by far the largest proportion of all the UK’s personal injury claims, and tellingly this is much higher percentage than is seen across the rest of Europe.
To address this, the MoJ’s first proposal is to introduce independent medical panels to review all whiplash claims as a means of filtering out false claims, with a universal target announced to reduce the nation’s motor insurance premiums by £80 per person.
It is anticipated that the independent medical panels will ‘go live’ in 2014, with the MoJ aiming to create and award accreditations specifically for whiplash assessment experts; introduce robust methods of reporting; and install quality appraisals.
However, a counter-argument for the creation of independent medical panels is that difficulties may arise through increased workloads for the selected GPs and medical professionals, with some practices already stretched due to the demands placed upon them, though it remains yet to be seen who will be part of the independent medical panels.
As the onus will be on the independent medical panels to decide whether a whiplash claim is true or false, it alleviates the pressure on PI firms by protecting genuine cases.
It is anticipated that the reduction of bogus claims will free up insurers to focus increased time, attention and resources onto the people who genuinely need legal representation.
Expectations are that the new measures will lead to insurers adopting a more collaborative approach with PI law firms, creating a more efficient and effective legal system within which the two sides can resolve liability issues and facilitate early rehabilitation.
Small claims limit
The confirmation that the MoJ has also reversed their decision to raise the small claims limit is an announcement that has been unanimously welcomed across the PI industry. By keeping the limit at £1000 instead of the proposed £5000, the general public retains their right of access to justice for genuine lower level injuries.
However, concern remains that the MoJ will review and amend this at some point in the future once the whiplash reforms have been fully implemented.
The industry-wide fear for the raising of the limit was principally because it could have meant that people with genuine injuries may have been left unable to claim damages, or challenge insurer’s offers even if they were below what their injuries may warrant.
It would also prevent solicitors taking on any claim worth less than £5000, meaning that genuinely injured and hardworking people would be denied their basic right to justice due to the exploitative and manipulative actions of a small percentage of society, namely those people who commit fraud to take advantage of the PI industry.
We welcome these new measures announced by the MoJ as we believe that they have the potential to completely rejuvenate the image of the whole PI industry, which has faced years of criticism due to the perceived rise of the UK’s ‘compensation culture’.
The MoJ’s changes will benefit those who genuinely need legal representation and assistance, particularly those who have experienced serious injuries in road traffic accidents, and they allow the public their right to justice for smaller, yet genuine claims.
It is an opportunity for the industry to display how its goal is the provision of access to justice for the people who need it the most, and as a result it can hopefully improve the general public’s perceptions of PI.