Government Whiplash Reform Proposals Dropped?

We have reported frequently on the Ministry of Justice’s (MoJ) plans for reforms to the personal injury sector and more specifically on the previous Chancellor, George Osbourne’s intentions to increase the small claims limit for personal injury claims from £1,000 to £5,000 and to remove the right to general damages for minor soft tissue claims i.e. whiplash claims.

However, following the Brexit vote in the summer of this year, we surmised that these reforms would likely take a back seat whilst the new Prime Minister Theresa May organised her new cabinet. Indeed, Michael Gove was replaced as Justice Secretary by Elizabeth Truss and George Osbourne was replaced as Chancellor of the Exchequer by Phillip Hammond.

It has been further reported this week that a representative at the MoJ has confirmed that the whiplash changes are not its priority, but claim reforms as a whole are ‘certainly not off the agenda’.[i] Insurers have reported ministers telling them that they are unenthusiastic about the proposals.. The Association of British Insurers has this week released a statement in which it reiterates the need for the Government to push ahead with these reforms. James Dalton, Director of General Insurance Policy said:

‘The Ministry of Justice seems to be rowing back from much needed reform to the civil justice system that will save motorists up to £50 a year on average. The UK has one of the most abused systems in Europe and the reforms would tackle the excesses of the compensation culture. Without action, claims management companies will continue to nuisance call and text honest motorists encouraging them to make fraudulent and exaggerated claims through claimant law firms. Every day of delay costs honest motorists across the UK nearly £3 million. The plans are drawn up and ready to go so there is no excuse for not pushing ahead’. [ii]

This news comes after a six month delay in the publishing of a consultation paper setting out how these reforms would be implemented. It is thought that the delay and possible setting aside of the reforms is due to resistance from the legal profession. Additionally, it has been made clear that the priority of the new Justice Secretary, Elizabeth Truss’ is prison reform as opposed to carrying on George Osborne’s legacy.