The New Whiplash Reforms and Their Impacts on PI Firms
What Are the New Whiplash Reforms?
The new whiplash reforms are new measures which have been introduced by the Government to change how whiplash claims are handled in England and Wales. The Civil Liability Act 2018 (CLA 2018), which was introduced in December 2018 will bring a number of changes to the way in which those suffering from whiplash injuries will be able to claim compensation. Some of the planned changes include:
- The introduction of a fixed tariff of damages awarded by the Courts for pain, suffering and loss of amenity for whiplash injuries sustained as a result of a road traffic accident.
- A ban on claims being settled without an assessment and medical report.
- Raising the Small Claims Track limit to £5,000, removing the ability for Claimants to recover any legal costs for these types of claims.
These changes may mean that Claimants will be unable to obtain legal representation for low-value whiplash claims. The Motor Insurance Bureau has been working alongside the Ministry of Justice and will be providing a new service for unrepresented Claimants affected by the reforms.
When will the New Whiplash Reforms Come into Force?
The new reforms were initially planned to come into force in April 2019; however, there have been a number of delays since this date and plans to enforce the reforms in April 2020 were delayed until August 2020. Since the Covid outbreak this year, the plans to introduce the reforms have again been delayed until April 2021.
Why Were the New Whiplash Reform Plans Introduced?
The Ministry of Justice (MOJ) has stated that the whiplash reform programme has been introduced to “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.” Although the new reforms have not came into force just yet, there are concerns as to how the changes may have an impact on access to justice for Claimants. There are further concerns that the new whiplash reforms will have a negative impact on some law firms who deal with these types of personal injury claims.
The Potential Impacts of the New Whiplash reforms on PI Firms
Personal injury lawyers have faced a number of challenges in the past decade with the changes made to the Civil Procedure Rules and the introduction of the Pre-Action Protocol and Fixed Costs in low-value personal injury cases. For many Personal Injury law firms, whiplash claims arising from Road Traffic Accidents make up a large proportion of their cases.
The new reforms will mean that many firms of solicitors will see a decrease in profits as a result of a decrease in the number of Road Traffic Accident cases in which Claimants regularly suffer low-value whiplash injuries.
For some, this may lead to financial struggles and some law firms may have no option but to close their doors. Others may be forced into making redundancies, restructuring, or exiting the RTA personal injury market and selling their Work in Progress files to help them focus on more profitable areas of law.
How Can Recovery First Assist?
Recovery First offers a positive solution for those affected by the whiplash reforms and wishing to exit the market to focus on other areas of law, or for those requiring a structured exit from the legal market.
The unique scheme offered by Recovery First is suitable for both law firms and professional advisors. Our team manage the transfer of files from start to finish; placing case files with an approved law firm so as to protect the integrity of the client’s case.
We guarantee 100% confidentiality for all clients and perform due diligence on all files. Get in touch today using the contact information or fill in the form on our “Contact Us” page, and we will contact you to discuss the process.