It has been reported that the Ministry of Justice (MoJ) does not intend to proceed with its proposed reform of personal injury claims at the current time. The reforms, on which we reported in our bulletin of 3 December 20151, were aimed at making it more difficult for people to claim compensation for exaggerated or fraudulent whiplash claims.
However, the MoJ has stated that it “remain[s] committed to tackling” the high cost and number of whiplash claims and the resultant effect on premiums for ordinary motorists.
The proposed reforms, announced in the Government’s Spending Review and Autumn Statement to the House of Commons of November 2015, were to increase the limit for personal injury claims in the Small Claims Court from £1,000 to £5,000 and to prohibit courts from awarding general damages for pain, suffering and loss of amenity in minor soft tissue injuries. It is unclear whether these proposals have simply been delayed and will be introduced at a later date, or whether the MoJ will look at different methods of tackling the issue.
The Association of British Insurers (the ABI) has issued a statement which strongly urges the government to “press ahead with its reforms”, which the ABI estimates “will save motorists up to £50 a year on average”and will leave “millions of honest customers…better off”. The ABI’s statement was also critical of claims management companies and so-called “ambulance chasers”, which it considers are a major cause of fraudulent and exaggerated claims.
We will continue to monitor this issue and report on any further developments if (or hopefully when) they occur.