Our readers will be aware of impending reforms, which are expected to have widescale effects on the personal injury sector.
We are of course referring to the rise in small claims track limit from £1,000 to £5,000 for road traffic accident (RTA) claims (and potentially to £2,000 for all other personal injury claims), alongside a whiplash compensation tariff system, a ban on offering/accepting settlement of whiplash claims without first obtaining medical evidence and bespoke IT-based RTA portal infrastructure.
These reforms, foreshadowed by Part 1 of the Civil Liability Act 2018, were initially supposed to come into force in April 2019. However, they were subsequently pushed back to April 2020 and, thanks to the COVID-19 pandemic, were delayed twice more to October 2020 and then again, to 6 April 2021. The latest timetable adjustments were reported in edition 319 of BC Disease News (here).
Today, we reveal that that the Ministry of Justice (MoJ), last month, decided that it would be rescheduling its implementation of these low-value personal injury reforms once more, for a 1-month period.[i]
The Forum of Insurance Lawyers (FOIL) has remarked that, whilst it is now understood that changes will take effect in May, it is not yet entirely clear whether claims will be affected from 1 May or some later date in the month.
According to the Lord Chancellor and Secretary of State for Justice, The Rt Hon Robert Buckland QC, this final deadline is part of a ‘sensible and pragmatic approach’ to assist under pressure stakeholder businesses.[ii] In the interests of ‘industry preparedness’, the Government understands that affected parties, on both the claimant and defendant side, require more time to ‘prepare … for the changes to how small road traffic personal injury claims are managed’, e.g. legal expenses insurance (LEI) cover needs, how disputes of liability and quantum will be sorted, etc.[iii]
However, without hearing the Lord Chief Justice’s view on the whiplash tariff consultation, or seeing the published pre-action protocol (PAP) and supporting rules, market players have warned that they will be unable to start their preparations, with many claiming that a minimum 12-week notice period is needed (though it is not clear that the Government will allow this).
Behind closed doors, though, there are signs that progress is being made.
In the absence of a formal announcement, it appears that the new whiplash PAP framework, which explains how the RTA portal will work for users advancing sub-£5,000 claims, was approved in January.
Legal industry news outlets shared the minutes of a Civil Procedure Rule Committee (CPRC) meeting, which took place on 22 January and recommended the Master of the Rolls’ approval of ‘draft road traffic accident small claims track pre-action protocol and its annexes’.[iv]
Concurrently, it is understood that the relevant Practice Direction will be laid before the CPRC ‘in due course’.
As for the Motor Insurers’ Bureau’s (MIB) litigant in person (LiP) portal, named the ‘Official Injury Claim Service’, current impressions suggest that it is ‘impressive, user-friendly and uses clear and accessible language’. This is in-part due to the ‘huge amount’ of background work undertaken by the delegated CPRC sub-committee.
Of course, speedy deployment is key to reduce the growing backlog of claims in the civil justice system of England & Wales. Of equal importance, though, is system functionality. If the new process is not fast and/or seamless for unrepresented claimants, there is a genuine risk that these claimants will consult the advice of claims management companies (CMC), which will take a percentage of the damages – contrary to reforms’ overarching aims. In addition, if there is no scope for alternative dispute resolution (ADR), it is conceivable that LiPs will opt to ‘let the judge decide’ whenever there is uncertainty and this would be detrimental to administration of civil justice.
With regards to draft whiplash injury regulations (detailing the compensation tariff, the uplift a judge can impose and the ban on pre-medical offers), Deputy Director of Civil Justice at the MoJ, David Parkin, told attendees of a PI Futures Event (November 2020), that these could be expected ‘early this year’. They will be introduced via affirmative resolution, meaning that there will be a debate in Parliament.
Conversely, new rules on small claims limit inflation (up to £5,000 and/or £2,000) will be introduced by way of negative resolution, i.e. it will become enforceable law, unless the House of Commons passes a motion to reject within 40-days of introduction.
The Working Group was tasked with recommending additional reforms (i.e. concerned with the consequences of fast-approaching May reforms) for personal injury claims valued at under £25,000 and this publication was the culmination of those recommendations. They called for:
- The MedCo system for diagnosing whiplash claims to be adapted if it is to be extended to apply to other personal injury claims, in such a way that it removes the ‘randomisation’ of expert selection and encourages specialist, high quality, audited medical experts to assess more complex, higher value injuries.[vi]
- ‘Great care’ to be taken if non-whiplash small personal injury claims are pushed into an extended MIB small claims portal, avoiding a ‘one-size fits all’[vii]
- The development of a dedicated PAP for all personal injury claims dealt with under the small claims track, which is accessible to all LiPs.
- A blanket ban on cold-calling.
- The Government to establish a ‘single, consistent and reliable database to facilitate the identification of the types of insurance fraud, their frequency and their sources’, in lieu of 12-months of Official Injury Claims portal litigation.
- Claims portal collaboration with the Financial Conduct Authority, to ensure that CMCs do not take advantage of vulnerable litigants, e.g. in COVID-19 infection claims.
- Greater clarification on the principle and definition of ‘fundamental dishonesty’ and ‘substantial injustice’, pursuant to s.57 of the Criminal Justice and Courts Act 2015, though some Working Group members considered judicial precedent to be the correct forum for deeper understanding.
Stay posted for more updates in the weeks and months ahead.
[i] Mark Dugdale, ‘Whiplash reforms and portal coming in May’ (12 January 2021 Claims Mag) <https://www.claimsmag.co.uk/2021/01/whiplash-reforms-and-portal-coming-in-may/17444> accessed 12 February 2021.
John Hyde, ‘Whiplash reforms delayed another month’ (11 January 2021 Law Gazette) <https://www.lawgazette.co.uk/news/whiplash-reforms-delayed-another-month/5106969.article> accessed 12 February 2021.
Neil Rose, ‘Whiplash reforms delayed AGAIN – but only for a month this time’ (11 January 2021 Legal Futures) <https://www.legalfutures.co.uk/latest-news/whiplash-reforms-delayed-again-but-only-for-a-month-this-time> accessed 12 February 2021.
[ii] Terry Gangcuangco, ‘Reaction pours in as whiplash reform programme delayed further’ (12 January 2021 Insurance Business) <https://www.insurancebusinessmag.com/uk/news/breaking-news/reaction-pours-in-as-whiplash-reform-programme-delayed-further-243250.aspx> accessed 12 February 2021.
[iii] John Hyde, ‘Insurer demands action to meet April’s whiplash reform date’ (6 January 2021 Law Gazette) <https://www.lawgazette.co.uk/news/insurer-demands-action-to-meet-aprils-whiplash-reform-date/5106903.article> accessed 12 February 2021.
[iv] Neil Rose, ‘Whiplash progress at last as protocol is all but approved’ (10 February 2021 Legal Futures) <https://www.legalfutures.co.uk/latest-news/whiplash-progress-at-last-as-protocol-is-all-but-approved> accessed 12 February 2021.
John Hyde, ‘Impressive’ whiplash portal backed ahead of May start date’ (10 February 2021 Law Gazette) <https://www.lawgazette.co.uk/news/impressive-whiplash-portal-backed-ahead-of-may-start-date/5107368.article> accessed 12 February 2021.
[v] ‘CJC publishes final report on low value personal injury claims’ (18 December 2020 Courts and Tribunals Judiciary) <https://www.judiciary.uk/announcements/cjc-publishes-final-report-on-low-value-personal-injury-claims/> accessed 12 February 2021.
Andrew Hogan, ‘The Fall of the Republic’ (4 January 2021 Costs Barrister) <https://costsbarrister.co.uk/personal-injury-costs/the-fall-of-the-republic/> accessed 12 February 2021.
Neil Rose, ‘Expert group lists worries about impact of whiplash reforms’ (22 December 2020 Legal Futures) <https://www.legalfutures.co.uk/latest-news/expert-group-lists-worries-about-impact-of-whiplash-reforms> accessed 12 February 2021.
[vi] John Hyde, ‘Experts cautious about further reform of personal injury market’ (22 December 2020 Law Gazette) <https://www.lawgazette.co.uk/news/experts-cautious-about-further-reform-of-personal-injury-market/5106848.article> accessed 6 January 2021.
[vii] Neil Rose, ‘CJC group urges “great care” in extending new portal to other PI claims’ (22 December 2020 Litigation Futures) https://www.litigationfutures.com/news/cjc-group-urges-great-care-in-extending-new-portal-to-other-pi-claims> accessed 6 January 2021.