Lawyers will adapt to serve injured clients affected by its whiplash reforms, with “unbundled” advice one option, the government has predicted as it made the first concession on the Civil Liability Bill by removing non-motor vehicle users from its scope.
However, all road users will be caught by the increase to the small claims limit happening parallel to the bill, said Lord Keen, the Ministry of Justice’s spokesman in the House of Lords.
In a letter to peers dealing with issues that came up in the bill’s second reading last month – and ahead of Thursday’s committee stage, when it can be amended – Lord Keen emphasised that claimants would not be denied legal representation.
“We believe that claimants bringing a claim in the small claims court should not usually require legal representation but are not precluded from doing so if they wish, and many will have such advice provided through legal expenses insurance which forms part of many motor insurance policies.”
Lord Keen continued that claimants could choose to represent themselves or “seek some other form of help or representation”, or apply to the court to have their claim heard in the fast-track if it was complex.
He added: “We expect lawyers to continue to adapt and be fully capable of providing cost-effective services to genuinely injured claimants following the implementation of these reforms.
“For example, the president of the Association of Personal Injury Lawyers recently confirmed that a number of firms are already development a new market on unbundled legal advice which will see lawyers provide low-cost advice on specific parts of the claims process.”
Lord Keen said the financial impact on the courts of more litigants in person would be “costs neutral” because they operate on a cost recovery basis for personal injury claims worth less than £10,000 – meaning any increase in workload would be offset by an increase in court fee income.
In relation to cyclists, motorcyclists and other road users, Lord Keen said the government has listened to the All Party Parliamentary Group on Cycling and other stakeholders, and decided to exclude them from the whiplash measures in the bill.
However, he stressed that the increase in the small claims limit to £5,000 for road traffic accident-related injury claims – which is running parallel to the bill – would apply to all road users.
Lord Keen also addressed the question of how it would monitor whether motor insurance premiums fall as a result of the reforms, which also include changing the way the discount rate is calculated, as the industry has claimed they would.
He said the competitive nature of the insurance market meant the government expected that insurers “would be forced to pass on any savings”.
He continued: “If the industry as a whole sought to avoid passing on any savings, this would signal the competitive nature of the market had changed. If this was to happen, the Financial Conduct Authority and Competition and Markets Authority would investigate and take appropriate action and the government would encourage them to do so.”