The Ministry of Justice has this week presented the Civil Liability Bill to the House of Lords with a view to getting legislation implemented by April 2019.
Amongst other things, one of the chief aims of the Bill is to severely reduce the level of compensation that insurers have to pay to motorists and passengers who suffer whiplash injuries as a result of another driver’s negligence.
As an example, claimants can currently expect to recover damages of between £2,500 – £3,500 for their pain and suffering caused by a 6-month whiplash injury. Under the proposals,
insurers are the Ministry of Justice is seeking to have a fixed tariff brought in for assessing whiplash compensation, with £400 being proposed as the amount of compensation that should be paid for a 6-month whiplash injury.
The current sources of reference for assessing damages are mainly the Judicial College Guidelines and case law (where Court awards in particular cases can be relied upon to show what level of damages a Judge is likely to award for a particular type of injury). No real reason has been put forward to justify precisely why sources of authority such as these, which have been built up over decades, should now be disregarded in whiplash cases in favour of a tariff scheme with figures which appear to have been arbitrarily plucked out of thin air by
the insurance industry the Ministry of Justice.
At a time when the Ministry of Justice has already confirmed its intention to raise the small claims limit for whiplash claims from £1,000 to £5,000 (preventing the vast majority of claimants from being able to afford to instruct a lawyer), it seems hugely unnecessary for them to also push for a tariff scheme that would reduce the vast majority of whiplash claims to a value of less than the existing £1,000 limit. But with the wind in their sails, the insurers simply see no reason to let up in their push for reform after reform.
All of this reform is being justified on the basis that it will save ‘honest’ motorists
£50 £40 £35 off of their insurance premiums. Firstly, such inflammatory remarks by the insurers and Ministry of Justice imply that all whiplash claimants are criminals! Secondly, the Government has confirmed that it will have no way of ensuring that insurers actually reduce their premiums and, at a time when premiums continue to increase whilst the cost and number of whiplash claims have fallen year after year, there is absolutely no reason to have confidence that motorists will feel the benefit of any savings, no matter how honest they are!
Whilst the large insurers have ‘pledged’ to ‘pass on savings’ from the reforms, that does not equate to premiums going down. It will be easy enough for the insurers to assure us that, even though our premiums have continued to go up, they are still £35 cheaper than they would have been! By then, the
meerkat nodding dog horse will have bolted!
So, in 2020, when your motor insurance premiums are continuing to increase year on year and yet you are unable to instruct a lawyer to represent you after suffering whiplash injuries in a car accident caused by someone else and you alone are left to face a court battle to get an insurance company to pay your £400 injury compensation and £9,000 lost earnings, just ask yourself – ‘What were the 2019 whiplash reforms all about?’ Did you get a fair deal in seeing your right to legal representation and fair compensation sold off for £35 per premium? Or, did insurance companies make a bucket out of reducing the amount of whiplash claims by hundreds of thousands, reducing the legal cost of whiplash claims by billions and reducing the cost of compensation payments by billions? Tough call.