Contribution from our friends at Accident Claims Web, providing legal advice and assistance on UK road traffic claims in the UK.
In November of last year, Chancellor George Osborne announced major changes affecting whiplash personal injury claims. The changes are part of a move to tackle ‘compensation culture’ in the UK that may be having a negative effect on insurance companies.
However, the announcement of the proposed changes to the law is causing problems for not only whiplash victims but also law firms and prominent personal injury bodies.
Proposed Changes Affecting Whiplash Claims
However, the practical application of the proposed changes in the law will mean that as general damages are no longer to be awarded for such claims, in order to make a claim for whiplash the special damages claim of the victim must be worth £10,000. This is a great restriction on making a whiplash claim and will eliminate a great number of cases.
The effect of the proposed changes has already affected personal injury firms. Personal injury firm, Slater & Gordon, has lost half its value after the announcement. The Australian company’s shares dropped 51pc to A$0.94 The company said:
“While the Government’s announcement was unexpected, the company believes that the scale and diversity of the Slater Gordon Solutions business in the UK positions it well to deal with the potential impact of any future legislative change,"
The problems with the new whiplash proposals have provoked backlash from prominent legal organizations. The Association of Personal Injury Lawyers, the Motor Accident Solicitors Society and the Law Society have come together to fight the proposals, largely backed by the insurance industry, which they deem to be "a red line issue". They will respond to the consultation expected to be pushed in March 2016. Each of the organizations will submit a separate response, each conveying a unified and uniform message about the proposals.
It will be interesting to see the effect of the changes in the personal injury claims industry when, and if, the new law comes into force as proposed. The government has indicated that it plans to introduce the general damages reform in April 2017, however at present; there is no indication of when and if the small claims limit will be at the same time or earlier.