The MoJ have released the consultation that the personal injury industry have been waiting for since George Osborne’s 2015 Autumn Statement. The consultation entitled “Reforming the Soft Tissue Injury “Whiplash” Claims Process” can be found here and requires a response by the 6th January 2017.
Despite a number of representations to the MoJ with regard to the unreasonableness of the consultation period in view of the significance of the proposed changes and intervening Christmas period including from Liverpool Law Society, it has been confirmed that there is no intention to extend that period. The MoJ are working to a timeline around the legislative change that will be required if the proposals go ahead. This means that they wish to release their own response during April. Part 8 of the consultation specifically concerns implementation and confirms that it will be “as soon as possible”.
George Osborne had originally stated that the intention behind the reform was to both reduce fraud and create a saving to private insurance premiums of £40 per annum. Interestingly the focus of the consultation is based more upon the saving that would be passed to policy holders from Insurers as a result of their making lower compensation payments rather than the costs of fraud. Those lower payments will be achieved by either removing the right to compensation for “whiplash” altogether or introducing a tariff where an injury of up to 6 months would attract an award of £400 with an additional £25 payment for any psychiatric elements. The model extends up to a 24 month injury for which £3500 would be received although the definition of “whiplash” is yet to be defined. In addition to reduction by value of award there will be a reduction in volume achieved through raising the small claims limit for injury to £5000.
There are far more points to be made about the proposal than this article permits many of which Capital Economics and Matthew Maxwell-Scott of Slater & Gordon Lawyers were able to explain at a meeting held for Liverpool Law Society members on 15th December. They presented information relating to the empirical data upon which the consultation has been based and that disproves for example that the costs of injury claims are £40 per annum and that raising the small claims limit would have unintended consequences that include the removal of access to justice for victims of employer’s liability and public liability claims. Capital Economics have engaged in surveys that are able to demonstrate the serious financial impact to Merseyside not just by the loss of legal jobs but in the loss of work for those businesses that provide services to the legal industry.
Liverpool Law Society represent both Claimant and Defendant lawyers and it was good to see Defendant presence at the discussion. The consultation is not just a Claimant issue but one that will impact the industry as a whole and we are working to ensure that a broad spectrum of views are canvassed and represented in our response. We are also engaging with The Law Society and other local law societies as well as trade bodies including the CHO and APIL. In early January our immediate Past President Alison Lobb and CLC Chair Kirsty McKno will meet with the Chair of the Transport Select Committee Louise Ellman to raise their awareness particularly with regard to the impact to accident victims not least that without representation they will not have the ability to access the MoJ portal to which claims must be submitted.
If there are any LLS members who would wish to contribute in some way please do make contact via LLS or at firstname.lastname@example.org by no later than the 3rd January 2017.