The pandemic is likely to fuel even more consolidation in the claimant legal market than the whiplash reforms were going to drive, says Qamar Anwar, managing director of First4Lawyers
Nobody was particularly surprised when justice secretary Robert Buckland announced last month that the whiplash reforms were to be delayed, with the coronavirus (Covid-19) crisis meaning that April 2021 is now the aim.
This is the third delay and next April will mark two years since the reforms were first meant to come in and more than five years since the policy was mooted by the government.
There is, of course, a certain irony in the government delaying an online system when everything else in the world seems to be going online, but the Ministry of Justice (MoJ) had little option. The Civil Procedure Rule Committee has still to sign off the new rules, practice direction and protocol, and is no doubt now preoccupied with urgent coronavirus-related changes.
This was against the background of Richard Hutchinson, the now former head of the whiplash reform programme at the MoJ, telling a Motor Insurers’ Bureau event in February: “We’re hoping to give you three months between finalisation [of the rules]and go-live, and from conversations we’ve had with the ABI and other stakeholders, that was an appropriate amount of time [to get ready].”
Were 1 August still the target, we would have needed the rules already, and it remains the case that there are still plenty of concerns and unanswered questions about the operation of the new regime, particularly as a result of the decision to ditch alternative dispute resolution from the portal. Hopefully we now have time to sort these out properly.
So it goes without saying that the whiplash reforms delay is welcome—the MoJ’s focus is rightly elsewhere at this time and it is worth highlighting once more that claims have long been on a downward trajectory anyway, so any delay is not going to cause much damage. With fewer motor claims too during lockdown, so much so that some insurers are giving money back to policyholders, it’s hard to see this as a priority area right now.
The MoJ is also to be congratulated for not kicking the can another two or three months down the road, which would have caused continuing uncertainty about the likelihood of it happening, and instead going for a more realistic timeframe.
Presuming the rules come out this summer, stakeholders would in normal circumstances now have enough time to ensure their systems are ready by next April. But, of course, these are about as far from normal circumstances as you can get. While I’m confident many law firms will have the strength and depth still to be trading by then, some will no doubt fall by the wayside—the pandemic is likely to fuel even more consolidation in the claimant legal market than the reforms were going to drive anyway. But will they all have the ability to invest the money and staff time needed to be ready for April 2021? It’s a legitimate concern.
Indeed, I would go further and question whether the aftermath of the economic havoc wrought by Covid-19 is really the time to impose on the public a system that makes an arbitrary reduction in the compensation they should receive as the victims of another’s negligence, and is set to overload the small claims court.
Either way, let’s not forget that the MoJ too has plenty still to do. As well as dealing with the outstanding policy issues, it needs to reassure the market about the plans it has for a public information campaign. They are bad enough for injured people without them being left clueless on the changes and how even to access the process.