The Government’s decision to press ahead with PI reforms will lead to the “PPI-fication” of the personal injury market, according to First4Lawyers.
Confirmation of the reforms has been made by Justice Minister, Sam Gyimah, who confirmed that a fixed tariff system will apply to all compensation for whiplash claims for injuries lasting up to two years. Further secondary legislative changes to the Civil Procedure Rules will increase the small claims track limit for road traffic accident related personal injury claims to £5,000, and for all other personal injury claims to £2,000.
Qamar Anwar, the managing director of First4Lawyers, said that the reforms would do nothing to stamp out “rogue” claims management companies.
“Unfortunately, this move will lead to the ‘PPI-fication’ of road traffic accidents. Far from helping improve the perception of fraudulent claims, it will simply drive up complaints and potential fraud,” he said.
He said that the Government’s decision to wave an indiscriminate axe to the amount of compensation available to those injured in road traffic accidents demonstrated a complete lack of empathy with how much people actually suffer following a crash.
“The unfairness inherent in these proposals is staggering,” he added.
“For most people, a claim worth £5,000 is not low value. The likelihood is that innocent accident victims will be left unrepresented to deal with the insurer’s lawyers, making under-settlements inevitable.
“Solicitors add much value to the process of managing compensation claims by not only funding aspects of the case, obtaining medical reports and other documentation, but also acting as gatekeepers in identifying and preventing fraudulent and exaggerated claims entering the system in the first place.”
Anwar also argued that the NHS would face serious strain because the reforms would lead to delaying access to rehabilitation and lower compensation, forcing people to use NHS services.
“And all the while, as the Government itself admits in the impact assessment, insurers walk away with a £200m windfall,” said Anwar.