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Government puts whiplash reforms on hold

Government puts whiplash reforms on hold

In his Autumn Statement last year, ex-Chancellor George Osborne announced radical new measures to help the UK Government crackdown on fraudulent whiplash and motor claims which, at the time, were estimated to cost the UK economy around £2 billion a year. The reforms were heavily criticised by personal injury lawyers and other experts in the legal industry at the time, but the government seemed determined to implement the measures. Nearly one year later however, and the Ministry of Justice has now surprisingly shelved the reforms, at least for the foreseeable future.

What changes were being implemented?

In his statement last year, George Osborne revealed that the right for general damages in minor soft tissue injuries was to be removed, while the small claims limit for personal injury claims was to be increased from £1,000 to £5,000, which would have meant that claimants would have been unable to claim legal aid for any personal injury claims valued below £5,000. The government also announced at the time that they would be investing £700m into digitising the UK court system. The government stressed at the time that these changes would help the average motorist save between £40 and £50 a year on insurance policies, by reducing the number of fraudulent whiplash claims.

Shelved, not scrapped

In early October, the Ministry of Justice sent out an email to members of the Association of British Insurers (ABI) stating that the Secretary of State has decided that she doesn’t want to proceed with the personal injury reforms at the current time. However, the MoJ was keen to stress that the reforms have been shelved and not scrapped, and would be reintroduced at a later date. The government has said that the number of fraudulent whiplash claims remains too high, and that it is committed to tackling this issue to ensure honest motorists save on their insurance premiums. This indicates that the government is highly likely to re-look at the methods and introduce modified measures at a later date.

Decision to shelve whiplash plans draws mixed opinions

When the reforms were announced last year, many personal injury lawyers and claimant groups were concerned that access to justice was being restricted for victims, and warned the government to be careful about introducing such sweeping changes to the personal injury sector. It is therefore unsurprising to hear that many legal experts and personal injury solicitors were happy with the government’s decision to shelve the reforms.

Neil Sugarman, president of the Association of Personal Injury Lawyers, has said that the reforms were aimed at the wrong target, and that the time has come for the government to investigate the real reason why insurance premiums continue to rise. Andrew Twambley, spokesman for pressure group Access to Justice, also added that the decision to shelve the reforms was “a victory for common sense”.

On the other hand, a statement from the ABI has said that fraudsters are “laughing all the way to the bank”, and that the government should press on with the reforms and not cave in to the “vested interests of claims management law firms”. In the statement, the ABI said that the UK has one of the most abused claims systems in Europe, and that the reforms are needed to tackle the growing compensation culture in the country.

Here at Fonseca Law, we support the government’s overall plan to reduce the number of fraudulent whiplash claims, but not at the expense of victims’ access to justice; we eagerly await the government’s next announcement on the matter.

If you have been injured in a road traffic accident, we can help you claim the compensation you deserve to help you get back on your feet. To find out more about our personal injury services, please contact us today on 0800 156 0770, email enquiries@fonsecalaw.co.uk or pop into our office based in Ebbw Vale, South Wales.