Controversial proposals to change the way personal injury claims for soft tissue injuries are processed have been heavily criticised by lawyers.
The new system raises the limit for claims through the small claims court from £1,000 to £5,000 for whiplash and minor psychological injuries sustained in road traffic accidents.
The government claims the measures are to reduce the number of fraudulent and exaggerated claims, which push motor insurance premiums ever higher.
By making the statement regarding fraudulent insurance claims, lawyers also believe the government is implying that lawyers are seeking to dishonestly make a profit through personal injury claims. One solicitor declared that since there have been massive cuts to the cost of claims and a reduction in the number of claims, the implications were ‘absurd and offensive’.
In addition, although there may be a dishonest few Claimants, the insurance industry has been unable to produce any reliable data to support the claims of widespread fraud.
Compensation may be more costly for Claimants to access
People who have sustained injury through the negligence of another have a right to be compensated for their pain, suffering and loss of amenity, but this right may be more difficult and costly to access in the new system.
Claimants may be deterred from bringing a claim, since legal costs incurred through the small claims court are not recoverable. There are also caps on the amounts that can be recovered for the costs of obtaining medical reports to support the claim.
The new fixed tariff to be introduced means that Claimants will receive as little as 10% of the current recommended claims values.
This may make the cost of treatment prohibitive and some motorists may attempt to ignore their injuries. Research from the insurance industry show that around 10% of motorists develop more serious long-term health-issues over time when the injuries are not treated.
The MoJ has suggested that motorists who do seek representation may obtain assistance from claims management companies or McKenzie Friends to assist them.
However, one senior partner of a law firm criticised the idea, saying that such organisations were not equipped to replace lawyers, since their workforces were ‘untrained, uninsured and unaccountable’.
Another solicitor considered the reforms were merely propaganda and did not tackle the real issue of fraud.
‘Most of the consultation is unfairly skewed in favour of insurers,’ said one head of a legal practice. ‘It seeks to shift the burdens you would expect to fall on the insurers onto innocent injured people and state bodies (such as the NHS) that will pick up the tab for unmet need.’
It is widely believed that the insurance companies are unlikely to pass on the savings to their customers.