Representatives of thousands of personal injury lawyers have slammed the government’s whiplash proposals, arguing that the incidence of fraud is exaggerated and adopting proposals for the benefit of insurers will lead to injustices.
Responses to the government’s whiplash consultation by the Law Society, the Chartered Institute of Legal Executives (CILEx), the Motor Accident Solicitors Association (MASS), and Access to Justice Action Group (AJAG), among others, time and again raised the concern that the proposals will risk the victims of genuine accidents being penalised.
There was unanimity in the view that raising the small claims limit for PI cases would mean ordinary victims who represent themselves being faced by highly experienced opponents on an uneven playing field.
Respondents highlighted the absence of any guarantee that savings would be passed on to consumers in the form of lower insurance premiums, although the insurance industry would undoubtedly benefit if the proposals were adopted.
The widespread condemnation follows Association of Personal Injury Lawyers’ (APIL) research which found that the involvement of a lawyer in whiplash cases leads to much larger settlements than claimants are initially offered by insurers, and that raising the small claims limit could reinvigorate the claims management industry.
Des Hudson, chief executive of the Law Society, said: “Different costs limits for some types of personal injury claim and other steps to place obstacles in the way of claimants will increase shareholder profits for insurers, while victims who have been injured in an accident are faced with little or no hope for justice.”
Meanwhile, raising the small claims limit “tips the odds in favour of the powerful and yet again unfairly promotes the interests of the insurance lobby whose promises to the Prime Minister to reduce motor premiums [are] likely to be unfulfilled”, he added.
CILEx described the consultation as “extremely one-sided and heavily influenced by the insurance industry, which ultimately has a vested interest in paying out less money”.
It pointed out that the Association of British Insurers’ (ABI) had itself estimated that proven fraudulent claims based on ‘staged accidents’ represented just one in 20 whiplash claims.
CILEx went on to argue that “there should be no change at all to the small claims track threshold”. Among other consequences, it would erode the principle of equality of arms and leave litigants in person “in a very vulnerable and unequal position”, it said.
MASS agreed the small claims limit should remain as it is. It warned that raising it “will severely hinder the operation of the portal system and protocol”. The portal would be “marginalised and rendered obsolete” in most RTA cases.
The solicitors also charged that the proposal for new independent medical panels would be “expensive, bureaucratic and unnecessary” as existing panels perform the same function. “MASS does not regard the current system to be open to large-scale abuse,” it added.
A refrain of the responses was that the proposals could not be viewed in isolation and were planned to be introduced alongside wider reforms to civil litigation. “CILEx is concerned that such proposals are being made to deal with a perceived problem rather than an actual problem,” it said.
The proposals “come as part of wider package” and should not be rushed in “without fully assessing the impact of the current wave of reforms”, said MASS.
AJAG did not pull its punches. It said the proposals are “based on the partisan contentions of the ABI with no objectively tested data to back them up… Genuine claimants will again see their access to justice further restricted as a result of government intervention on behalf of big business as against the individual citizen.”
A PI law firm, Manchester-based Express Solicitors, was no less scathing. It backed APIL’s research, saying its final settlement figures have “substantially exceeded” offers to clients from insurers. There would potentially be more fraud in a system with a £5,000 small claims limit, not less, because claims management company-type operations would take the place of solicitors.
Express’s managing partner, James Maxey, joined with the others when he called for a “pause” to examine the effects of other changes, including the referral fee ban.