UK Whiplash Reforms to lower legal costs

Read time: 3 minutes

News & Blog News UK Whiplash Reforms to lower legal costs

UK Whiplash Reforms to lower legal costs

Read time: 3 minutes
The Small Claims Threshold for bodily injury claims in the UK is expected to be raised from £1,000 to £5,000 in April 2019. This will have a considerable impact on MTPL claims as the measure reduces the amount of legal costs to be paid by insurers.
The proposed reforms in UK whiplash claims intended to be introduced in October this year have been postponed. They are now expected to be introduced in April 2019 the Government has announced last week.

The Ministry of Justice (MoJ) outlined the timetable for the reforms at a meeting with Claimant lawyer associations and the Law Society. We can therefore expect to see the publication of The Civil Liability Bill soon.

Reducing indemnities and legal costs in whiplash claims

Currently the court allocates low value bodily injury claims worth less than £1,000 to the Small Claims Track. In this track only very limited legal costs are recoverable. The reforms will focus on increasing the Small Claims Track limit for bodily injury claims to £5,000. This will affect the vast majority of MTPL claims, reducing the amount of legal costs insurers will have to pay.

The reforms are also expected to include the introduction of a tariff system for injuries with a prognosis of up to two years. This will substantially reduce the awards to Claimants, compared to the current averages paid and the ranges contained in the Judicial College Guidelines. Awards might be reduced by around 85% in the most minor of claims and 15% in claims with 24 month injuries.

Additionally it is proposed that there will be a ban on making offers without medical evidence to Claimants who present a claim for whiplash. ‘Pre-med’ offers are a tool used by some insurers to attempt to reduce overall indemnity spend and legal costs in certain claims.

There will inevitably be resistance from the Claimant lobby. Whilst previously the reforms have been delayed as Brexit considerations have taken up a lot of parliament’s time, it is hoped that MoJ’s announcement will mean that the government are committed to progressing these reforms.

Paul Lavelle

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