Concerns over changes to personal injury law pay outs

30/05/2017
Author: Neil Seddon

Despite falling road traffic accidents and improving car safety, the government is attempting to change personal injury laws, blaming the increase in compensation claims.

Justice Secretary, Liz Truss recently stated that the government intends to tackle the county’s “rampant compensation culture” by introducing a reduction in the level of pay outs victims of road traffic accidents receive from around £1,600 to £225 for soft tissue injuries, such as whiplash. But in an earlier debate, Ms Truss was asked what evidence underpinned the changes and proposed compensation tariff figures.

She replied: “We have changed the figures in response to the consultation document. Those were judged to be fair and reasonable for the level of injury that we are talking about in this case”. But, Labour MP, Rob Marris described the tariff as “bizarre… with no evidence of where the government got their figures from, but just an assertion from the Secretary of State that they believe in fair compensation”.

Shadow Justice Secretary, Richard Burgon said the proposed reforms of personal injury whiplash claims were based on “a false premise”. He went on to say that injured people “should not be made to pay the price for the behaviour of the unscrupulous minority” – specifically cold-calling claims management companies. He also urged the government to obtain guarantees from insurance companies that they would pass on the savings from the reforms.

Personal injury solicitors concerns are that if they’re no longer able to recover legal costs, injured victims will have no one to turn to, leaving insurance companies to deal with claimants direct. It’s fair to say that profit margins are likely to be high on the insurance industry’s agenda, so the best interests of the injured party may not always be the primary consideration.

The legal sector also believes that government’s changes will deter people with genuine claims from accessing legal representation and, without solicitors acting on their behalf, victims may not receive the correct level of compensation. Also, from a judicial perspective, there will inevitably be an increase in the number of people who try to take on the insurance companies. For those brave enough, they will have to be adept at navigating complex areas of law, while it remains to be seen how the courts will cope.