The Civil Liability Act reforms went live yesterday with the government promising an end to “greedy opportunism” while claimant representatives deemed it a “sad day for justice”.
Five and a half years in the making, and more than two years after they were first meant to go live, the reforms are designed to reduce “the unacceptably high number of whiplash claims made each year”, the Ministry of Justice (MoJ) insisted – without saying what an acceptable number was.
The MoJ described the new Official Injury Claim portal for road traffic claims (RTAs) worth up to £5,000 as “user-friendly” – despite criticism of the 64-page guide for litigants in person – which it said would remove the need for “expensive lawyers”.
The reforms also introduce a ban on settling whiplash cases without medical evidence, a practice which the MoJ said has “opened the door to fraudulent or embellished claims”.
However, the ban was called for by claimant representatives to stop insurers trying to settle claims directly with injured people before they contacted a solicitor.
The MoJ said insurers have pledged to pass on £1.2bn of savings created by the reforms, meaning “up to £35” less a year in insurance.
There has not been an express pledge along these lines from most but the Financial Conduct Authority is required under the Act to report on this, albeit it is unlikely to happen before 2024 at the earliest.
Lord Chancellor Robert Buckland added: “For too long the system for making whiplash claims has been open to abuse by individuals looking for an easy payday – with ordinary motorists paying the price.
“Our changes will put an end to this greedy opportunism and ultimately see savings put back into the pockets of the country’s drivers.”
The MoJ also quoted Steve Gooding, director of the RAC Foundation, saying: “There are almost as many lurid headlines about whiplash claims as there are claims themselves.
“This new system should mean legitimate cases are easier and quicker to deal with, fraudulent claims are more likely to fail and all drivers benefit from decreases in their insurance premiums.”
Dave Lovely, general insurance claims director at Aviva – which has led insurer lobbying for reform over the past decade – said the reforms would transform “Britain’s compensation culture”.
“For the insurance industry, the new law allows us to focus on those people with genuine injuries and claims to ensure we help them when they need us most.
“This is a powerful example of the insurance industry working for the benefit of its customers, and Aviva stands by its promise to pass on 100% of the savings we see from the reforms to our customers.”
Gerard Stilliard, head of personal injury strategy at Thompsons Solicitors, argued that the government “has done its very best to sneak these new rules in with as little fanfare as possible”.
He said most people were “completely unaware” that if they suffered a road traffic accident they faced “having to deal with a complex online portal relying on a 64-page guide described by the Association of Consumer Support Organisations as ‘legal treacle’”.
He went on: “It’s no surprise that the government is keeping quiet about these changes given that it’s going to lead to delay, unfairness and a denial of justice…
“The only people to gain from these changes will be cold callers and shareholders of insurance companies.”
Qamar Anwar, managing director of First4Lawyers, described it as “a sad day for justice”. He continued: “The lack of compassion and common sense shown by the government with the introduction of this programme beggars’ belief.
“All available data shows that the supposed whiplash culture is a fiction, yet the government has ploughed on regardless…
“How many claimants do they think will sift through 64 pages to guide them through their claim? Worse still, how will claimants know if their claim is worth more or less than £5,000?… I doubt very much that any of us will see the £35 savings.”
Shirley Woolham, chief executive of Minster Law, struck a more conciliatory note. “We expect there to be some teething problems, but the best way of resolving them is by acting collectively, remembering that we all share the same customer,” she said.
“I am encouraged by the new spirit of co-operation between all sides of the claims industry, arising from the pandemic, and am confident that in future, industry-led solutions will be far more responsive to the needs of our injured customers than the government’s legislative approach.”