Posted by Jonathan White, legal director of Legal Futures Associate National Accident Helpline
The announcement that the Civil Liability Act, and the changes which come with it, will not now be implemented until April 2021 is sensible and welcome. These changes – referred to widely as the whiplash reforms – will change the way that lower-value claims following road traffic accidents are handled.
The government’s announcement noted that the Covid-19 pandemic has, as in other industries, had an “unprecedented impact on the medical, legal and insurance sectors”. It agreed that, while the whiplash reform measures remained important, “now is not the time to press ahead with significant transformational change to the personal injury sector”.
The new launch date of April 2021 is an eight-month delay from the previously announced date of August 2020 and a year from the original target of April 2020. It will also be over five years since the reforms were first announced.
It is interesting to note that the Lord Chancellor hints that further re-timetabling may be necessary and, sensibly, the April 2021 date is not cast in stone. It is likely that the justice system will see a significant log jam of cases created by the Covid 19 crisis and it would make sense to clear any backlog before launching a new scheme which is likely to lead to high volumes of small claims proceedings created by the absence of the promised ADR mechanism (more on this below).
It is also noteworthy that the recent announcement makes no reference to parallel changes in employers’ liability and other non-motor claims.
The government appears to have sensibly adopted an approach of considering these additional measures when the RTA reforms have bedded in. Formal confirmation has not been provided and this would be welcomed by the personal injury sector and insurers.
There is now the opportunity for the government to use the extra time to iron out what we believe are a significant number of outstanding issues which must be resolved before the new system goes live.
Access to justice
The new portal is a system which will be used by lawyers and members of the public alike, so it is essential that it is fit for purpose and ready to go. Access to justice is something which should be readily available to us all, and my concern is that non-lawyers trying to argue their case under the new arrangements and using the new systems will be placed at an unfair disadvantage.
One of the points which needs urgent attention is the absence of the initially promised alternative dispute resolution (ADR) from the new arrangements. When the two sides in a claim cannot agree liability, the absence of ADR will mean the unrepresented claimant will need to issue court proceedings.
This clearly places injured people who are representing themselves and do not have a lawyer at a distinct disadvantage. It means litigants in person (LiPs) must either give up their claim altogether or go to head to head with a well-resourced, legally represented opponent.
It also paves the way for insurers to simply ignore claims brought by LiPs with little or no consequences. Why would insurers be motivated to respond to a claim, let alone to settle it, when they know LiPs may not be able to take them on at the next stage, in court, without support?
This is a real issue, as under the current system, where some insurers have developed ‘portal strategies’ which involve ignoring claims and deliberately allowing them to time out. Other insurer strategies involve liaising directly with represented claimants whilst pre-medical offers remain commonplace, despite government policy.
I think it is naïve to think insurers will concede liability in all appropriate cases where the commercial incentive is to do the opposite.
The decision to scrap ADR goes against earlier reassurances from ministers and incentivises insurers to deny liability, ignore claims and cut claims costs.
This point urgently needs addressing because, without ADR in place, there is no incentive for insurers to allocate appropriate resources to handle claims. In the absence of ADR, there must be some form of carrot or stick to ensure insurers play ball.
Getting ready for change
The new date for implementation will also help businesses like ours get ready to help people with their claims under the new rules. There is little public awareness of these changes, and yet people will continue to be injured in road accidents and then contact us for help.
We – and other businesses – need time to finalise our processes, IT systems and training so that, on day one of the new arrangements, we are ready to help people.
In order to prepare properly, we must have sight of all the information involved as early as possible. With this in mind, we urge the Ministry of Justice to continue to make progress and publish the final rules as far in advance of April 2021 as it can.
There is still much to do
There is still much for the government to do ahead of the introduction of the reforms – one job is the not inconsiderable task of publicising the changes and new portal to make members of the public aware of them.
We sincerely hope that this extension to the timeframe will be used wisely to ensure the launch of a system in April 2021 which works as intended and ensures access to justice for all its users.