It’s time for the government to listen on whiplash reforms

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With the long-awaited whiplash reforms and portal delayed again, what does the MoJ still need to do before they finally arrive? Qamar Anwar, managing director of First4Lawyers, takes a look

It would be wrong to accuse the Ministry of Justice (MoJ) of never listening. The fact that the whiplash reforms have now been put back four times—most recently by a month to May 2021—shows that it does understand at least that all sides of the personal injury market need the now-fabled minimum of three months to prepare for the new regime when (if?) the new court rules are finally published. 

I would suggest that all stakeholders most probably need more than three, especially as we are in the depths of lockdown, but let’s put that to one side for a moment.

Readers will all know how claimant groups view these reforms. Our arguments are often dismissed for being self-serving, although surely that cuts both ways. But shortly before Christmas, a group of claimant and defendant representatives, as well as judges—convened by the non-partisan Civil Justice Council—came together to highlight a worrying list of concerns about the changes in a report on possible further reforms for low-value (under £25,000) personal injury claims.

This was no claimant love-in. Chaired by Nicola Critchley, a partner at defendant law firm DWF, the working group’s members included two representatives of the Forum of Insurance Lawyers, one from the Association of British Insurers and one from NHS Resolution.

It warned that the absence of measures to handle credit hire, credit repair and rehabilitation in the new Official Injury Claim portal “could result in a claimant with a modest claim under one of those headings being forced to bring conventional small claims track proceedings for a modest sum (a few hundred pounds), tying up court resources but potentially waiting around 40 weeks for a hearing to take place”.

The average litigant in person may well struggle to understand which parts of their claim should be dealt with through the portal and which parts cannot, or which parts will be handled by a third party under an industry agreement, the group said. 

I suspect that this question of dealing with claims involving both tariff and non-tariff injuries is going to dog the new regime—the MoJ’s suggestion that the courts should decide through a test case will cause huge delays and problems for all.

Who is going to explain to the lay person that their own claim is stayed for the next year while a legal argument is had on another claim that has nothing to do with them—as will happen in test case litigation? Good luck with that!

The report states that the rules have to be drafted in such a way that they are capable of being understood by those relying on them to bring a claim, ie, litigants in person, and the varying degrees of intellectual capabilities that exist in that group. This is an interesting challenge for those drafting and rubber stamping the rules, but it makes complete sense, as how can you expect anyone to be capable of pursuing a claim if they can’t understand the rules for doing so?

The group went on that the absence of alternative dispute resolution in the portal compounded its concerns of a “potential huge increase in small claims hearings”, and it reckoned that many litigants in person would choose to roll the dice and go to court, especially if they doubted the insurer was dealing with them fairly.

Like many, the group was concerned about how less scrupulous claims management companies (CMCs) may be attracted to the opportunities the portal offered: “Based on previous experience, the group anticipates that the reforms to the whiplash regime contained within the Civil Liability Act will lead to some CMCs attempting to exploit the market.”

The group continued: “The introduction of the tariff will reduce general damages for the whiplash element of a motor-related personal injury claim but still provides an opportunity to maximise general damages in the non-whiplash elements and in special damages areas such as credit hire, credit repairs, storage, recovery, rehabilitation, etc.”

This may lead to “various types of adverse behaviours”, it warned, such as unfair, unwarranted or excessive high-cost damages-based agreements; undercover ‘service charges’; and the emergence of claims ‘hi-jacking’ apps or services, advising clients not to use their own insurer.

The group urged several measures: solicitor and CMC regulators should work “as closely as possible” to police referral fees and ensure there was no unlawful trading of claims, there should be blanket ban on cold calling, and strict controls of CMCs’ charging, while CMCs should be obliged to enquire about the existence of legal expenses insurance before taking on a claim.

More broadly, the report said any move to push non-whiplash small personal injury claims into the new portal should be taken with “great care, avoiding a ‘one-size fits all’ approach”. And nothing should be done until the impact of the new regime is judged.

The group urged the government to establish a “single, consistent and reliable database to facilitate the identification of the types of insurance fraud, their frequency and their sources”. This could then be used for a consultation on how best to combat fraudulent and unmeritorious claims in the future, along with a “coordinated campaign to educate the public as to the true nature of insurance fraud, its cost to the general population, and the criminal and civil penalties for making or supporting a fraudulent claim”.

Overall, the group recognised that the drivers behind unmeritorious claims are multifactorial and there is no magic bullet to address them. It emphasised the care needed when devising and implementing further reforms, and the importance of monitoring progress and outcomes.

I suspect there is a lot of this report that stakeholders on all sides would agree with. The question is, will the government listen to the working group? It may listen from time to time, but the answer, I’m afraid, is probably not. And that, in the end, is bad for all of us.

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