In November 2015, the then Chancellor George Osbourne proposed plans for further reform to the Personal Injury sector, including plans to raise the small claims limit to £5,000 and to scrap compensation for soft tissue injuries entirely.
The personal injury sector and after the event issuers have waited with baited breath since then for news on these proposals, and it has now been announced that Justice secretary Liz Truss is rethinking plans for the major overhaul of the personal injury sector. It is understood that the secretary of state has decided not to go ahead with reforms ‘at the moment’.
Law Society Chief executive Catherine Dixon said: 'We’re delighted government has recognised that its proposed changes to personal injury claims would hamper access to justice, particularly for those on lower incomes. Anyone who suffers injury through no fault of their own should be entitled to claim the compensation they need to help them recover and get on with their lives.'
Of course not all parties are happy with the apparent moratorium on such reforms, with the Associate of British Insurers (ABI) saying that the decision will see ‘ambulance-chasers laughing all the way to the bank’. The Ministry of Justice have since commented that ‘The number and cost of whiplash claims remains too high, increasing premiums for ordinary motorists. We remain committed to tackling this issue, and will set out our plans in due course.’
Over the years, the personal injury sector and the after the event Insurance market have seen the industry weather many storms, but these particular reforms may have been a step too far. It is clear however that the industry needs work to continue to help genuine claimants and to remain transparent. In particular, work still needs to be done in regulating CMC’s specifically working to end cold calling.
As ATE Insurers, we are of course keen to insure Claimants are as fairly represented as possible. Hopefully this pause in reform is a shift away from the unnecessary hostility between the two sectors, and will allow time for sensible discussion and progress, rather than a one way implementation of further onerous legislation.