Whiplash Reforms: How Are Firms Preparing?
The law relating to low value road traffic accident (RTA) claims in England and Wales is changing on 31st May 2021, with an online portal system being introduced. This new portal will allow persons injured in a road traffic accident, on or after 31st May, to lodge their own claim for compensation.
These changes are coming about as a result of The Civil Liability Act 2018, which was introduced in December 2018, and whilst there have been a number of delays to the date these reforms would come into play, 31st May has now been confirmed.
The main changes are the introduction of a fixed tariff for whiplash injuries sustained in a road traffic accident and the increase of the small claims track limit (SCT limit) for road traffic accident claims from £1,000 to £5,000.
The fixed tariff for damages will be split into two sections; the upper tariff will include whiplash, AND minor psychological injuries and the lower tariff will include whiplash injuries with no psychological injuries.
The £5,000 limit applies only to the figure for pain, suffering and loss of amenity for the injury; the overall small claims track limit for the value of the entirety of the claim will remain at £10,000.
This new limit will mean that claimants will not be able to recover legal costs and will instead need to pay privately for legal representation or represent themselves. There will also be a ban on claims being settled without a medical assessment and medical report.
Over the past decade, personal injury Solicitors have faced many challenges as a result of 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. Whilst the increase in the small claims limit is only applicable to road traffic accidents, and presently no increase in the limit will apply to other types of personal injury claims, these changes will have a substantial impact on many personal injury firms who focus on whiplash claims and low value personal injury claims arising from road traffic accidents.
So, how are firms preparing for the whiplash reforms?
A survey undertaken by First4Lawyers in December 2020 indicated that only 18% of claimant injury solicitors said their firm had settled on a strategy to deal with the new whiplash reforms, with 41% of the same respondents stating the reforms would have a major impact on their firm.
A number of firms have developed their IT systems to introduce an online personal injury portal, including Minister Law’s INK portal and New Law Solicitors PILOT portal. These are designed to integrate fully with the Official Injury Claim Portal which has been developed by the Motor Insurance Bureau to enable people injured in an accident on, or after, 31st May 2021 to claim through this service directly, without the need for legal assistance, if their claim is valued at under £5,000.
Claims management companies have also been planning for these reforms coming into effect by transitioning from CMC to technology-enabled law firms that are able to provide an end to end legal service for small claims.
For smaller firms who are not able to invest the large sums of money needed to introduce their own online portals, there are existing software products on the market which integrate with case management systems to provide a semi-automated claims process, thus reducing the amount of time spent on cases by fee earning staff.
Many firms will also inevitably be considering whether now is the time to run down their personal injury departments or exit from the market entirely as a result of the impacts of the whiplash reforms.
How can Recovery First Assist?
Whilst there are various options available to enable this, Recovery First help law firms to withdraw from the legal market whilst ensuring 100% of the recoverable WIP value is retained by the law firm. We work alongside solicitors, accountants, restructuring and corporate recovery specialists to ensure the most profitable outcome is achieved on any file transfer agreement.
We offer 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.
For a confidential chat about how Recovery First could assist, email email@example.com