Despite reports in October 2016 indicating that the Government was no longer proceeding with whiplash reform, the Ministry of Justice has now set out a package of proposed measures intended to disincentivise minor, exaggerated and fraudulent road traffic accident (RTA)-related soft-tissue injury claims.
The proposals go beyond suggestions previously mooted and look set to drastically change the way in which whiplash claims are dealt with. While RTA claims are the main focus here some of the proposals will impact all personal injury claims.
Scrap or cap compensation for minor RTA-related soft tissue injury claims
The first proposal is to either remove compensation for pain, suffering and loss of amenity (PSLA) in respect of minor RTA soft tissue injury claims, or alternatively limit damages in those cases to £400 - or £425 if there is a psychological element to the claim. The current average award for such claims is £1850.
The consultation also calls for views on whether a ‘minor’ injury should be one that lasts six months or less, or nine months or less. The length of injury will either be assessed on a ‘prognosis’ basis similar to the current approach, or a ‘diagnosis’ basis where the claimant is not examined until six months after the accident to assess whether injury is on-going.
Reduce compensation for other RTA-related soft tissue injury claims
The second proposal is to introduce a tariff system for claims that are above the ‘minor’ threshold, similar to that used in other jurisdictions such as Italy, France, Spain and Sweden. The consultation paper sets out a table of proposed awards ranging from £400 for a 0-6 month injury (£425 with psychological injury) up to a maximum of £3500 for a 19-24 month injury (£3600 with psychological injury).
The consultation seeks views on the figures provided and whether the judiciary should be granted discretion to award an ‘uplift’ of up to 20% in exceptional cases.
Raise the small claims track limit for personal injury claims to £5,000
The third proposal is to increase the small claims track limit to all injury claims with a PSLA value of up to £5,000. The consultation also suggests that all claims with a prognosis period or 12 months or less would automatically transfer to the small claims track.
This would mean that the costs of such claims would no longer be recoverable from defendants in the majority of soft tissue injury claims, with the exception of court fees and disbursements. The idea is that the claimants would have a direct financial interest in the proceedings and this will discourage spurious claims.
The consultation suggests that as a result, claimants will be less likely to seek legal representation and more claimants will act as litigants in person.
The consultation seeks views on whether this increase should apply to all injury claims or just RTA-related claims. The government’s preferred option is to raise it for all claims to avoid creating multiple thresholds and systems for different types of injury claims.
Ban pre-medical offers to settle
This proposal reiterates a previous suggestion that claims should not be settled without medical evidence provided by MedCo accredited practitioners. It is thought that mandating the need for a medical report to evidence claims will deter minor, exaggerated or fraudulent claims.
Views are also sought on whether the ban should apply to other types of personal injury claims beyond whiplash, and how it should be enforced.
The consultation also seeks views on:
- Requiring claimants to identify the referral source on the claims notification form
- Amending the qualified one way costs shifting provisions so that a claimant is required to seek the court’s permission to discontinue less than 28 days before trial
- Early notification of claims so that injury claims should be notified, and medical advice sought within a certain timeframe
- Controlling the cost of credit hire through either a first party model, additional regulation or code of conduct
- Reducing the cost of rehabilitation through the use of MedCo, rehabilitation vouchers or passing control to defendants
- Restricting recovery of certain disbursements meaning the claimant would bear the cost of the first medical report
- Whether a points-based approach to assessing injuries, similar to that used in France, Spain and Italy, should be used to calculate damages.
The proposals are wide-ranging and will have significant consequences for the way that whiplash claims are dealt with. Some practitioners have already raised concerns that the proposals will inhibit access to justice and increase the influence of claims management companies.
These proposals undoubtedly come at a time of great change for civil procedure. It is not clear how these proposals will coincide with on-going consultations over fixed costs and the creation of an online court.
Ultimately we will have to wait and see what package of reforms the Government settles on but it is clear that the personal injury arena is going to be subject to another radical set of changes.
The consultation paper can be found here. The government has requested submissions by 6 January 2017. For further information, please contact: