The upcoming reforms looking to shake up the way road traffic accidents claims are dealt with were supposedly designed to crack down on a “compensation culture” and encourage more would-be-litigants to self represent rather than enlisting the help of lawyers.
However, a recent development from a major player in the field, National Accident Helpline, may change how this is perceived.
The reforms, delayed several times already, which are set to come into force in 2020, involve a tariff based system of damages with much reduced figures for compensation. This is alongside a new small claims limit of £5,000, a substantial leap from the current £1,000. These reforms will inevitably lead to many litigants running their own claims as they will be unable to recover the costs of legal representation for lower value claims under the new reforms. It has been proposed that the Ministry of Justice will launch an online platform to facilitate the bringing of a claim without legal representation.
The Ministry of Justice said:
“There will need to be extensive user testing in order to ensure that the system is easy to use for all user groups and that the guidance is clear. We agree with the committee and our stakeholders that it is crucial that these reforms and the implementation of the online platform is done right rather than quickly.”
The short history of these reforms has already seen much controversy since their conception. Chris Grayling, then Justice Secretary, insisted the measures would cut fraud and benefit honest drivers who have had to “bear the price of a system that has been open to abuse”.
Iain Stark, chairman of the Association of Costs Lawyers, said the proposals could spell ‘disaster’ for consumers and the legal profession alike. Stark also gave warnings that these reforms could lead to an unregulated sector for claims below £5,000 with the already busy courts being overwhelmed with litigants in person. He said:
“These new proposals will remove most cases from the system, leaving just the higher-value, more complex ones at unfairly low-fee levels,”
Meanwhile the chairman of the Motor Accident Solicitors Society, Craig Budsworth said of the reforms “The government has forgotten that the majority of whiplash claims in this country are genuine”.
It was insisted by Grayling that the reforms will go some way to combat the problems posed by fraudulent or exaggerated claims “genuine claims can still be settled but fraudsters are left in no doubt there will be no more easy paydays.”
A Law Society spokesperson said:
“Raising the small claims limit runs the very real risk that the already swamped courts will be flooded with self represented litigants, causing the inevitable delays that come with that. Of equal concern is the likelihood of a growing number of those who need treatment may be put off making a claim when they have a genuine injury. They will be the walking injured, literally.”
“The onus here surely has to be on insurers. They need to do more to challenge false claims properly and their reasons for not doing so are flimsy to say the least. The government’s plans seem to be geared towards squeezing everyone – including those who suffer genuine injury – except the insurers.”
|Injury Duration||2015 Average payment for PSLA – uplifted to take account of JCG uplift (industry data)||Judicial College Guideline (JCG) amounts (13th edition) Published September 2015||New Tariff Amounts|
|0-3 Months||£1,750||A few hundred pounds to £2,050||£225|
|4-6 Months||£2,150||£2,050 to £3,630||£450|
|7-9 Months||£2,600||£2,050 to £3,630||£765|
|10-12 Months||£3,100||£2,050 to £3,630||£1,190|
|13-15 Months||£3,500||£3,630 to £6,600||£1,820|
|16-18 Months||£3,950||£3,630 to £6,600||£2,660|
|19-24 Months||£4,500||£3,630 to £6,600||£3,725|
However, the move to decrease the role of law firms in dealing with road traffic accident can already be seen to be having an unexpected impact. National Accident Helpline (‘NAH’), known for their personal injury work and referrals to panel firms, have announced that a “new type of law firm is needed” in response to the proposed reforms. In short they plan to launch a small claims practice to deal with the constraints of the reforms.
The new business will focus on cases that, next year, will be small claims under the whiplash reforms and looks set to develop an online platform for Claimant’s to get assistance with managing their claims.
It is a well held view that the reforms will see Claimant’s being disadvantaged as they are tasked with dealing with claims that could be worth up to £5,000 without any input from solicitors or legal professionals. However, it seems that NAH have found a potential way to maintain their involvement in this type of work which would allow NAH “to optimise the customer experience”, whilst retaining a greater proportion of the fees and “creating maximum value for our shareholders”.
The impending reforms pose many questions and it will be a case of wait and see to determine how they play out. Whilst the reforms were designed to prevent abuse of the system there are concerns that some aspects may still be susceptible to manipulation.
At Jordans Solicitors we are concerned by the likely impact of these upcoming reforms. The ability of a Claimant to access justice will be affected and there will be those who are put off claiming for their injuries due to the fact that they will be forced to be litigants in person. We believe in access to justice and in supporting innocent victims of injury. We understand that, as a victim of an accident, you need help and support to make a full recovery as soon as possible. We have a dedicated team of lawyers able to assist you in pursuing a claim for compensation with offices across Yorkshire in Dewsbury, Horsforth, Selby and Wakefield.