The Civil Liability Bill returns to the House of Commons today, as trade groups and claims experts argue against watering down whiplash reform and warn MPs about potential, unintended consequences for the NHS.
Laurence Besemer, CEO of the Forum of Insurance Lawyers (FOIL), urged MPs to avoid changing the definition of claims covered by the bill, which has already happened three times, and block any attempts to remove the proposed cap on damages for whiplash claims.
He said: “FOIL believes that any weakening of the proposals, particularly around the definition and the tariff, will seriously affect the potential for the bill to reduce claims and costs and deliver the savings to policyholders which the government is seeking.”
Besemer also stressed the importance of the increase in the small claims track limit, to £5,000 for road traffic accident claims and £2,000 for all other personal injury claims, particularly since the introduction of these and other elements of whiplash reform were delayed by a year in response to concerns about access to justice.
He said: “[FOIL] believes that concerns at the increase in the small claims track are misguided particularly in view of the concessions made by the government in the Lords following the Justice Select Committee report, allowing more time for the new electronic platform to be developed and thoroughly tested, delaying the introduction of the new regime until 2020. The outcome of the second reading is keenly awaited by all parts of the claims sector.”
Vidisha Joshi, managing partner of London law firm Hodge Jones & Allen, urged MPs “to highlight the gaping holes in this highly questionable bill”.
He argued: “It is staggering that such fundamental reform can be based on such flimsy or non-existent evidence—for example, the Ministry of Justice has never explained, despite even the Justice Select Committee asking, how it came up with the figures in the new compensation tariff. What we do know, however, is that the number of claims is falling, while both premiums and insurers’ profits are rising.”
Joshi added on the small claims limit rises: “MPs must also take the government to task over the increase in the small claims limit for personal injury cases, which is so fundamental to the reform programme but is not actually in the bill.”
“The reality is that members of the public will only understand the true effect of this bill after they are injured in an accident and find their rights severely curtailed. I urge MPs to act, otherwise their constituents face yet another attack on their ability to access justice.”
Commenting ahead of today’s second reading of the Civil Liability Bill in the House of Commons, Qamar Anwar, managing director of First4Lawyers, which has campaigned against whiplash reform, said: “Today the Civil Liability Bill finally gets debated in the House of Commons, and we call upon the MPs to make the bold and substantial changes that this bill needs to ensure that innocent motorists and those injured due to the negligence of others are not left to negotiate a complex legal system without proper guidance and support.”
“The public has a right to expect MPs to protect them from reforms that will ultimately line the pockets of insurers. In contrast, those suffering an injury lasting up to three months will see compensation levels plummet from £1,800 to just £235.”
The Civil Liability Bill will also introduce fundamental changes to the way the personal injury discount rate is set, taking it away from ‘very low risk’ and moving it to ‘low risk’ investments.
Slashed from 2.5% to -0.75% in March 2017, the decrease in the personal injury discount rate cost NHS Resolution at least an extra £400 million in clinical negligence claims.
Emma Hallinan, director of claims policy and legal at the Medical Protection Society (MPS), said: “Swift progress is needed on the Civil Liability Bill to reform the way the discount rate is set to address the ever rising cost of clinical negligence. We are calling for the bill not to be watered down as it progresses, so that the decision on the rate change can be implemented promptly.”
“Of the £520 million increase in NHS spend on clinical negligence in 2017/2018; over £400 million was due to the recent change in the discount rate. The Civil Liability Bill will help to ensure that patients continue to have access to compensation but with lump sum payments more accurately reflecting their needs and with the total cost to the NHS and healthcare professionals being more affordable.”
“This is without doubt a difficult debate to have, but difficult decisions are made about spending in healthcare every day and we have reached a point where the amount society pays for clinical negligence must be one of them.”
Despite these potential cost savings, Brett Dixon, president of the Association of Personal Injury lawyers (APIL), warned MPs about possible unintended consequences for the NHS.
Dixon explained: “The bill seeks to change how compensation is calculated for people with life-changing injuries, such as brain or spinal damage. The upshot is that people will almost certainly receive less compensation and will have to make risky investments with it to try to make it stretch for the rest of their lives. There is every likelihood that the funding will run out, leaving people to rely on the NHS for their care.”
“Many of those who support this legislation believe it will reduce the NHS’s own compensation bill. But the cost falls back on the NHS anyway when people run out of the compensation which is supposed to pay for their care. The big difference is that if the Civil Liability Bill goes ahead, the NHS will not only have to pay for its own negligence but for everyone else’s as well. That includes employers who cause serious injuries at work, or negligent drivers who cause life-changing injuries to other motorists. It’s absolutely right that the NHS should pay for its own negligence, but not for everyone else’s as well.”