PLANS TO CURB WHIPLASH CLAIMS FINALLY REVEALED BY MOJ

Changes to the personal injury claims’ process have been mooted several times, and the recent publication of the Ministry of Justice (MoJ) consultation paper on plans to tackle the number and costs of ‘whiplash’ claims seems likely to draw a conclusion to the topic.

The MoJ’s proposals, which include a cap on the compensation available and an increase in the small claims court level for personal injury, are aimed at saving the insurance industry around £1bn a year and for these to be passed on to consumers through reduced motor premiums.

The measures outlined in the consultation document include:

• Capping compensation that would see the average pay-out cut from £1850 to a maximum amount of £425
• A ban on pre-medical report offers, meaning compensation would only be paid out if a medical report from a MedCo accredited expert was provided as proof of injury
• Raising the limit for cases in the small claims court for all personal injury claims – not just those resulting from a road traffic accident, as originally suggested in the 2015 Autumn Statement – from £1,000 to £5,000
• The introduction of a transparent tariff based system for claims relating to more significant injuries

The consultation will run until 6^th January 2017.

Arc Legal has continued to monitor and actively assess the potential impact on Legal Expenses Insurance of the proposed changes to small claims court limits and removal of compensation for soft tissue injuries. It, previously, produced a series of options papers considering different aspects of the proposed changes on products and will continue to update clients on how the market is likely to respond to the changes.

If you would like to discuss this in further detail, please contact your Account Manager.