21 November, 2016
Following our article reporting rumours that the government had decided to shelve the PI reforms announced by George Osbourne in his Autumn Statement in 2015, a full consultation headed "Reforming the soft tissue injury ('whiplash') claims process: a consultation on arrangements concerning personal injury claims in England and Wales" has subsequently been published by the government.
In this unexpected move, the government have brought forward a package of measures to crack down on minor, exaggerated and fraudulent soft tissue injury ('whiplash') claims stemming from road traffic accidents (RTAs). It is hoped that the package of measures will disincentivise minor, exaggerated and fraudulent road traffic accident related soft-tissue injury claims.
In the foreword to the Consultation, Lord Keen of Elie QC acknowledges that this is a complex area, and that claims are brought for a number of reasons. However, whiplash claims are 50 per cent higher than a decade ago, despite fewer accidents being reported.
The Consultation paper proposes that compensation for pain, suffering and loss of amenity (PSLA) for minor whiplash claims will either be removed entirely or replaced by a fixed sum of £400 (£425 with a psychological element). In addition, the Consultation considers a number of other proposals including:
In addition, the government is also gathering views on other issues affecting the personal injury sector including:
According to the government, the reform package seeks to tackle incentives on both sides to reduce the significant costs associated with personal injury claims. Whilst the government considers the proposals to be a coherent package, they also ask that the measures are considered individually.
From a defendant's point of view, if small claims limit increased to £5000, this would have the effect that the cost of such claims would no longer be recoverable from defendants, although certain costs arising from litigation and a number of disbursements could still be claimed by a successful claimant.
In addition if pre-med offers are banned, this prohibition may also be extended to slip and trip claims. According to the report, anecdotal evidence indicates that claimants following a slip/trip can be subject to such offers from supermarkets and local authorities.
The consultation is open for a relatively short period and closes on 6 January. There is no time stated for when the proposals will be implemented, but it is anticipated that the reforms will be put into effect as soon as possible.
A copy of the Consultation can be found here.