Experts debating the Civil Liability Bill at the Association of British Insurers (ABI) Motor Conference in London yesterday backed whiplash reform to remove incentives for making spurious and expensive claims, but warned that there may be unintended consequences.
The Civil Liability Bill passed through the House of Lords yesterday with no amendments. The legislation looks set to receive royal assent soon.
The legislation will significantly restrict damages for whiplash claims and require medical evidence before any settlements can be struck.
Separate secondary legislation will cap damages for soft-tissue injuries at the significantly higher level of £5,000, as well as £2,000 for all other personal injury claims.
Whiplash reform will, in effect, force what is a large chunk of personal injury claims into a new online portal being developed by the insurance industry to handle small-claims track cases focusing on soft tissue injuries.
Together, these reforms are expected to decrease the use of lawyers for many personal injury claims, as claimants represent themselves online.
Speaking at the ABI Motor Conference, David Parkin, deputy director for civil justice and law at the Ministry of Justice, confirmed that the online portal is on course for launch in April 2020, although much work remains to be done in the meantime.
Donna Scully, director at Carpenters Group, warned that the online portal may bring some unintended consequences, such as bypassing the filter that claims teams provide upon initial notification, as well as making it easier for fraudsters to pursue phony claims.
But Andy Watson, CEO of Ageas UK, said that whiplash reform will remove important incentives for making unnecessary claims, and will reduce an expensive cost. It will be up to insurers to assess the situation in 2020 and see if any further work is required.
Watson also dismissed claims that the insurance industry won’t pass on savings from whiplash reform to consumers, arguing that the competitive nature of the industry, his and others’ pledge to pass on savings, and the government’s requirement for insurers to report on their progress, will all guarantee that this will happen in the near future.
The Civil Liability Bill emerged from the House of Commons unscathed in October after the government defeated attempts to restrict a rise in the upper limit to the small claims track.