The government, through the Justice Minister, The Right Honourable Elizabeth Truss, issued a consultation on reforming the soft tissue injury (whiplash) claims process.
This government seems to be intent on changing the whole claims process for the worse. It is clear that the insurance industry have been lobbying the government for some time to ban whiplash claims and also to increase the small claims limit to £5,000.00, it currently being £1,000.00.
The government’s proposals can be found by clicking here.
If these proposals are made then each and every victim of a wrongdoers actions i.e. a bad driver, will suffer.
Having dealt with soft tissue injury claims and whiplash claims for over 15 years, I may have been extremely fortunate that not one of those has ever appeared to be a fraudulent claim.
The insurance industry are portraying that if these proposals come in, then it will save each and every person £40.00 on their insurance. I have to rebut that suggestion as this was recently rebutted by data provided by Thompsons Solicitors showing what they were saying was not correct.
The insurance industry is now saying that it will save each and every person £40.00.
What this government seem not to be able to tell everybody is that insurance premium tax has risen so that it now currently stands at 10.5% whereas recently, up until October, it was only 6.5%. This has increased insurance premiums. The tax will also increase in June 2017 to 12%.
If the small claims court limit for personal injury claims is increased from £1,000.00 for general damages to £5,000.00 then this will have a disastrous effect for those who wish to claim compensation as their claim will fall within the small claims limit.
It is likely to be the case that those who have claims within the small claims track will be frightened to bring them, due to the costs and complications of issuing a claim.
The Court are likely to have to deal with far more litigants in person than they already do.
The number of claims dealt with by law firms will decrease, not only for claimant firms but also for the companies that deal with insurance work for the insurance industry, defendant firms.
By this simple change as well it is likely that a large number of businesses will suffer including law firms, claims management companies, medical professionals, rehabilitative providers, barristers, and that the Treasury will lose millions of pounds in PAYE, national insurance contributions, employers national insurance contributions, VAT, corporation tax and landlords will lose rent.
It is also likely that companies who no longer survive will no longer be funding Councils with council tax payments and business rates. To the industry that this insurance industry wishes to change will cause vast changes to the legal landscape, not for the better.
More importantly the rights of those injured will change forever and the people who have been innocent victims will suffer. The wrongdoers who are insured will benefit, as will the insurance industry. It is imperative that this message is shared and that these changes must not take place. If they do, then everyone will suffer in the long term.