The government will need to fill in the detail of the Civil Liability Bill carefully to avoid a new outbreak of litigation because of claimants trying to “game the system”, a leading defendant law firm has cautioned.
However, claimant lawyers have promised to keep fighting over the secondary legislation that will implement the bill, which passed its final reading in the House of Commons on Tuesday.
Deborah Newberry, head of public affairs at global law firm Kennedys, said: “The passing of the Civil Liability Bill will provide compensators some much needed certainly, particularly around the discount rate, and they can now start to take proactive steps to adapting their claims handling models to accommodate the proposed measures…
“For the whiplash measures, the accompanying regulations will, though, need to provide some missing detail around the definition of whiplash injury, and provide some clear guidance to the judiciary as to what circumstances could be considered ‘exceptional’ in order to justify an award uplift.
“Failure to do so will risk gaming of the system to get around the proposed tariff system or in order to increase the value of a claim, and could create a risk of frictional litigation between parties.
“It is reassuring that the Bill does include a mechanism to review the definition of whiplash, but the government will need to keep a close eye on behaviours that seek to exploit the system.”
Ms Newberry said justice minister Rory Stewart was “misguided” to say in Parliament that the bill would remove unnecessary complexity, costs and damage arising from the activities of claims management companies (CMCs).
“Increasing the small claims limit is likely to be viewed as creating a ripe area for CMCs,” she said. “With that in mind the government should not be lulled into thinking that, once the bill is passed, that PI reform is ‘job done’.
“The Ministry of Justice, along with the Financial Conduct Authority – which will regulate CMCs from next year – will need to stay alive to how the market works in order to prevent fraud and claims farming.”
By contrast, the Association of Personal Injury Lawyers (APIL) argued that the government had “discarded the principle of full and fair redress for people injured through no fault of their own” by pushing the bill through.
President Brett Dixon said: “Contrary to what ministers claim, the government has made it clear that it doesn’t care about injured people, no matter how devastating the injuries. Insurance companies’ profit margins are obviously more important.”
He insisted that genuine injured people – whether affected by the whiplash or discount rate elements of the bill – “have been vilified for the sake of saving a supposed £35 on each premium”.
He added: “Hard-working, genuine motorists whom ministers and insurers claim to represent will find their compulsory insurance cover will not be sufficient when they need it.”
Claimant lawyer Vidisha Joshi, managing partner of London firm Hodge Jones & Allen, said: “I am saddened but not surprised that the government refused to budge on the Civil Liability Bill, even when it came to protecting children and other vulnerable individuals from the new regime.
“Claimant lawyers will however, continue to make the case to protect their clients and access to justice, and with secondary legislation to implement much of the bill still to be agreed, there remains much to play for.
“The government should be aware that we as a firm, and many others, will be watching very closely to see if the proposed online portal for claims will actually deliver the experience minister Rory Stewart said that it should.
“If history is anything to go by, Ministry of Justice IT projects are not without their issues, as has been seen before with the problems caused by it introducing other systems in personal injury before they were ready.
“We hope that officials have learned their lesson that rushing implementation to meet an arbitrary deadline does not serve anybody’s interests.”
Qamar Anwar, managing director of First4lawyers, added: “It’s hugely frustrating that the government’s wholesale attack on innocent injury victims remains unchallenged. MPs have let their constituents down by failing to halt reforms that only serve to line the pockets of the powerful insurance lobby.
“What’s more, the public have no idea what’s coming their way; our own research showed just 18% knew of the government’s plans.
“That said, the bill can’t be implemented without secondary legislation so the government should be on stand-by that this is not yet a ‘done-deal’. We’ll be refocusing our campaigning efforts now on the secondary legislation.”
Mr Anwar predicted that the likelihood of the online portal being ready for use by thousands of consumers from April 2020 was “slim”.
“We’ll be watching this closely and looking for assurances from the government that the portal is fit for purpose from day one. If they can’t guarantee this, then they’ll need to swallow their pride and move the implementation date back.”
Speaking last week, MIB chief executive Dominic Clayden – who is charged with delivering the portal – said he expected to meet the April 2020 deadline.