2019 Personal Injury Reforms - What Will They Mean For You?

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Personal Injury Reforms 2019

Controversial personal injury reforms which significantly restrict a person’s access to justice following a road traffic accident are set to be implemented in April 2019, according to the Ministry of Justice. This is despite public money being spent on a Commons review committee, which critics have pointed out is largely unnecessary if the reforms have already been announced as going through. However, it is important that the public should be made fully aware of the changes given the longstanding and fundamental legal rights that the reforms are set to take away.

What are the personal injury reforms?

The reforms come in the shape of the Civil Liability Bill, which is mainly looking at low value personal injury claims (particularly whiplash claims), and will raise the small claims limit to £5,000, and for all other claims to £2,000. This effectively means that no legal costs will be recoverable for these claims and hence injured claimants will most likely be forced to proceed with claims without legal representation, or be put off pursuing justice altogether. A tariff system will also be introduced, aimed at decreasing the level of damages that are paid out.

In essence, the proposed changes will effectively remove a person’s right to seek legal representation following a road traffic injury, amidst the widespread belief that the reforms are motivated largely by the insurance industry. There is also doubt as to whether the promised reduction in insurance premiums (promised as a result of the changes) will actually come to fruition.  This has prompted concerns from the legal sector and the general public as to the motives for the changes and what the potential future consequences.

Misgivings over the proposed personal injury reforms

Misgivings over the proposed reforms are numerous, not least that they are effectively pressuring people into representing themselves in any legal action relating to a road traffic accident. It is also believed that if the Government can be pressurised into making these changes by the insurance industry, then a dangerous precedent will be set. Another factor in the background, adding to the sense of unease and suspicion, is that ministers have suggested that further reforms will be implemented. These will undoubtedly again affect individuals seeking legal representation, especially in the areas of injuries at work and public liability claims.

The insurance industry has promised that premiums will be reduced by around £35- but there is doubt over the legitimacy of these claims. Several reforms implemented in the past have involved similar promises, but the proposed benefits have not materialised. There are also suggestions that the reforms may well be unworkable in practice, with the Law Society claiming that 76% of doctors have said they would not accept instructions from an injured person representing themselves and who did not have a solicitor.

Reducing fraudulent and dishonest personal injury claims

In theory, the chief motivation for the insurance industry wanting to implement these reforms is to crack down on fraudulent and dishonest claims. The legal sector has argued that there is already a framework of consequences in place aimed at cracking down on these, and hence people making genuine claims are being unfairly affected- purely to benefit the insurance industry.

The Ministry of Justice claims that £32 million will be saved by the insurance industry as a net effect of supposedly fraudulent personal injury claims not being pursued. There is however, a clear danger that these reforms will also prevent genuine claims being made. Additionally, these changes take place against a backdrop of a steady decline in whiplash claims being made since the Jackson reforms of April 2013.  The Ministry of Justice also claims that £49million of income has been lost by legal firms already suffering from a decline in personal injury claims. Inevitably this figure will now rise significantly, with legal firms seeing a natural wastage of legal expertise in this area and having to diversify their operations to find new revenue streams and remain viable.

Personal injury discount rate obstructing access to justice

Another controversial aspect of the personal injury reforms is a change to how the discount rate is calculated. This is the rate used to reflect the return a claimant should expect upon investing their compensation lump sum payout. This was changed from 2.5% to – 0.75% in March 2017, and further changes are proposed on the back of a Ministry of Justice suggestion that many claimants aren’t investing their compensation payouts. It is also felt that claimants would now have to invest more aggressively to ensure the inflationary rises in care packages can be covered, and hence their ongoing basic needs are met for life; the basic requirement of a payment of damages following a road traffic injury.

Again it is felt this aspect of the reforms is being implemented purely to placate the insurance industry, who have had to pay additional sums to injured claimants since the rate was reduced. This adds further fuel to the overall belief that innocent and honest claimants are being obstructed from an access to justice and a basic legal right.

For more information on what the 2019 personal injury reforms might mean for you, please contact our Head of Personal Injury Gareth Naylor.

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