Lord Faulks has ended months of uncertainty by confirming that the consultation on further reforms to personal injury will not be published until after the EU referendum, but will be implemented in 2017.
As part of his announcement the Civil Justice Minister gave an assurance that the government will work to ensure that insurance companies pass on the savings from the reforms to policyholders, as outlined in their original proposals.
During his speech at the Association of Personal Injury Lawyers annual conference in Birmingham, Lord Faulks said the pre-election and referendum ‘purdah’ periods restricted what he could say, but he indicated that the release of consultations would not happen until after the 23 June referendum.
The consultation will seek to give parties the chance to provide feedback on proposals to raise the claims limit to £5,000 and removing general damages for ‘low value’ whiplash cases.
The measures will be introduced through a mix of both primary and secondary legislation, Lord Faulks said, “with the aim for them to be implemented in 2017”.
Addressing the conference, Lord Faulks said: “The government accepts that many personal injury claims are genuine, but there are also many fraudulent, exaggerated and trivial claims made each year. The level of compensation paid out for such claims is out of all proportion to the genuine injury suffered, especially when balanced against the effect they have on the premiums paid by ordinary motorists.
“Removing such claims from the system will help to tackle the disproportionate costs attached to dealing with these claims.”
During his talk he was asked by delegates about the need for independent evidence on the level of proven, rather than suspected fraud, instead of relying on figures supplied by insurers. Lord Faulks agreed that there should be “robust data”, but did not say whether the government was actively seeking it.
Reviewing existing reforms, Lord Faulks predicted that there would not be too many cases involving findings of ‘fundamental dishonesty’, and suggested that the main aim was to deter people from over-claiming.
Incoming APIL president Neil Sugarman said the government’s plans to plough ahead with its reforms were “baseless” and “frustrating”.
He said: “The government continues to give the impression that injuries which don’t attract a great deal of compensation, such as whiplash injuries, are somehow ‘trivial’ or ‘unnecessary’ and that people suffering with those injuries should not be allowed damages for their pain and suffering at all. But anyone who has had such an injury knows just how painful and debilitating it can be…
“Government figures show us that whiplash claims are falling and a whole raft of reforms have been introduced to reduce costs and help prevent fraud. But innocent and vulnerable people are still being targeted in what has become a game of numbers rather than of the needs of individuals.”
The uncertainty surrounding the future of the personal injury sector continues to be of concern to a number of legal practices, as the changes proposed by the government will have a significant impact on the fee income of those who offer personal injury legal assistance.
If your firm deals within this sector and is worried about the effect the changes may have on your practice then our team of specialists at Moore Thompson can help you plan ahead to minimise the impact on your income. To find out how we can help you, please contact us.