Whiplash reforms go ahead – one year on

Some 51 weeks after the ideas were first outlined in the 2015 Autumn Statement, the Ministry of Justice has finally started consultation on what the necessary measures to put a brake on the worst excesses of whiplash claims should look like. The consultation paper can be accessed here.

The proposals – the main ones are to restrict general damages for whiplash and to increase the small claims limit so as to curb legal fees – have always been controversial since former Chancellor Osborne announced these ideas last November.

The fact that Mrs May’s Government has chosen, using very firm language today, to press on with them despite that and despite the massive shadow cast by Brexit surely shows its commitment to making the changes. That is further emphasised by the fairly short consultation period which ends on 6 January (just eight weeks away, including Christmas and New Year).

The paper today sets out the principles that will inform the legal changes to come. Make no mistake that the undertone of the consultation is ‘we will do this, now help us with the detail’. It is definitely not a general call for ideas.

So what to do next?

  • First, think about the customer. Premium payers and those injured in accidents are at the heart of these reforms and they need to know what’s happening, why and what it means for them.
  • Second, use the next eight weeks to marshal your arguments, refine any supporting data and get your response in on time.
  • Third, expect an almighty backlash from the claimant legal community against these reforms but remain prepared to collaborate constructively with them on what the motor claims process will look like after the changes take effect.
  • Fourth, make a realistic assessment of the possible implementation date(s) and start straight away on business process and resource planning so as to be ready.
  • Fifth, bear in mind wider claims reforms due in 2017, such as Lord Justice Jackson’s new work on fixing legal costs in higher value claims (the latest consultation on which also closes in mid-January).

Finally, as ever, be aware of the very real risk of unintended consequences. These might include a stimulus to the claims management sector if lawyers move away from whiplash cases – but into what? The 2013 costs reforms lead directly to increases in clinical negligence claims and in noise-induced hearing loss claims because they were outside the reforms. What might similar exceptions be in 2017 that might see spikes in legal activity and are you prepared for those as well?

About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).

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