New legislation, due to be read in the House of Lords on 24 April 2018, will introduce tariffs on road traffic accident claims, and it will launch alongside a new £5,000 small claims limit in a cocktail of measures that will seriously hurt claimant lawyers. In fact, the Ministry of Justice has said that claimant lawyers could lose around £80m a year in fee income following the introduction of new personal injury reforms.

Last week, the Ministry of Justice published an impact assessment in regard to the Civil Liability Bill and forecast that lawyers will lose around £32m alone from personal injury claims that will no longer proceed. In addition, a further £49m will be lost from personal injury firms’ revenue due to claims which proceed, but proceed without the claimant having sufficient or any legal representation.

It has been suggested that the new personal injury reforms, along with the introduction of a £5,000 small claims limit will ultimately take lawyers out of the claim system, while costs will no longer be recoverable, and damages paid will be reduced significantly.

NHS and HM Revenue & Customs to lose out

The UK Government has revealed that a reduction in claims and increase in claimants without legal representation will see HM Revenue & Customs lose around £140m, while the NHS could lose around £6m a year as a result of not being able to recover costs from at-fault insurers.

The impact assessment added that defendant insurers could incur around £19m in extra costs for medical reports, but could expect around £1.3bn a year in benefits due to reduced claims numbers and reduced damages payments - 85% of these benefits will be passed on to consumers, which means that insurers will pocket a windfall of around £190m a year.

The judiciary has estimated that the percentage of claimants without legal representation would increase from 5% to 30% following the introduction of personal injury reforms, but the impact assessment has said that new systems will be in place to help claimants proceed without lawyers, with the goal being to reduce the burden on small claims courts.

Despite criticism of the personal injury reforms and the £5,000 small claims limit, the UK Government has said that market failures had caused an increase in claims being made and settled, and suggested that intervention is needed to reduce costs and claims. The government’s impact assessment continued to say that market failures have contributed to a situation in the UK where it has become culturally acceptable for some people to make minor, exaggerated, or fraudulent soft tissue injury claims; today, a substantial industry has developed that encourages such claims.

The impact assessment noted that most whiplash claims are straightforward in nature, especially when liability is admitted and the value is known, meaning the £5,000 small claims limit is suitable for these claims.

Here at Fonseca Law, we’re experts in personal injury claims, so if you’ve been injured in an accident that wasn’t your fault, get in touch with our team of solicitors today on 01495 303124, email: enquiries@fonsecalaw.co.uk, or pop into our offices based in Ebbw Vale, South Wales.