Yesterday was a momentous day in the world of Personal Injury, as details of the Government’s proposals on reforming the small claims process were published following consultation. It is likely that these changes will become law in 2018.
So what are the proposed changes to the law and what will they mean?
Firstly, there will now be fixed tariffs on compensation for “whiplash claims” (soft tissue injuries arising from Road Traffic Accidents), where the recovery from injury lasts up to two years. These tariffs will be divided into bands depending on the length of time it takes for an injured person to make a full recovery. For example, if you suffer a whiplash injury but fully recovery within three months, you will only be awarded £225. These awards are significantly lower than the current values of these injuries.
Insurance companies will also be banned from making offers to settle claims before the injured person has obtained a medical report, which will hopefully help reduce both the amount of fraudulent claims and ensure that injured people obtain the correct value of compensation for their injuries.
In addition to the above, the Government has also increased the small claims limit for all “soft tissue” injuries arising from road traffic accidents, with an increase from £1,000 up to £5,000. Additionally there has also been increase from £1,000 to £2,000 on the limit for all other types of personal injury claims, this is to reflect inflation.
What this will effectively mean is those who suffer from “whiplash” or other soft tissue injuries in road traffic accidents will be unlikely to use solicitors going forward. After the new law takes effect, they will have to pay their own legal fees in full out of their compensation.
So what impact will this have on those making a claim?
Some will try to handle claims themselves, putting them on an unequal footing as they deal with experienced claims handlers and solicitors employed by insurers. Others will be deterred from making a claim and so thousands of people who will be entitled to compensation will not receive it.
The Government “expects” motor insurance premiums to reduce by an average of £40 as a result of the reforms, but has made no rules or law to ensure that the insurers do so. Whether they do or not remains to be seen.
The above reforms are likely to be implemented by 1 October 2018. Meaning people who have suffered only soft tissue injuries (ie no fractures, scars, psychological or other injuries) as a result of an accident that wasn’t their fault should see a solicitor as soon as possible, to ensure their claim is dealt with under the law as it stands.
If you have any questions, we are happy to speak to you about any type of claim via telephone 0114 218 4000 or by email at P.I.Dept@tayloremmet.co.uk.