The Ministry of Justice has announced proposed reforms to the personal injury claim process. The consultation paper, which is referred to below, has suggested that the right for an injured party to claim for whiplash injuries be removed, or at least limited to a small fixed sum, plus actual financial losses suffered, such as lost earnings.
The proposal is being billed as the fight against fraudulent claims and crash for cash cases, which will in turn lead to motor insurance policy premiums being lowered. However, a further measure that has been suggested is to raise the limit for claims that would be heard on the Small Claims track from £1,000 to £5,000. It would appear that the intention is that this rise would apply to all personal claims, not just road traffic/whiplash claims.
This is important as for matters heard on the Small Claims track, generally the successful party will not be able to recover their costs. This therefore presents the real possibility in the future of injured parties, suffering losses up to £5,000, but potentially not being able to get access to justice due to the fact no one will be willing to represent them.
The measures suggested therefore don't appear to be simply a way to reduce insurance premiums, but also a control on legitimate personal injury claims, which may well effect thousands of injured people in the future.
The consultation paper outlines plans to scrap the right to compensation or put a cap on the amount people can claim for minor whiplash injuries. Capping compensation would see the average pay-out cut from £1,850 to a maximum amount of £425. Compensation would only be paid out if a medical report was provided as proof of injury. Other measures include: introducing a transparent tariff system of compensation payments for claims with more significant injuries raising the limit for cases in the small claims court for all personal injury claims from £1,000 to £5,000 banning offers to settle claims without medical evidence. All claims would need a report from a MedCo accredited medical expert before any pay out.