Threshold for Small Claims Set to Increase in Plans to Cut Whiplash Claims

Earlier this week, Chris Grayling, the coalition Justice Secretary, opened a four-month consultation aimed at bringing down the number of whiplash claims brought in England and Wales.

In recent years, the road traffic accident (RTA) claims system has been bogged down with fraudulent or exaggerated injury claims which have cost road users money. According to insurance industry experts, bogus whiplash compensation claims cost insurance companies £2bn every year and this is reflected in the soaring premiums paid by motorists.

By increasing the limit for small claims from £1000 to £5000, the Ministry of Justice (MoJ) hopes to reduce the number of unwelcome claims and also reduce the role of injury solicitors to more serious claims.

Mr Grayling admitted that in doing so, some would-be claimants will find it difficult to achieve justice becoming unable to contest unreasonable insurance offers or claim the deserved compensation payouts. However, he insisted that the proposals will cut down on the “abuse” of the system. You can almost hear the cheers from our insurance companies at hearing that claimants, in small claims up to £5k will be without legal advice of their own – in contrast to the insurance companies, who will turn up with specialist compensation claim solicitors – hardly a level playing field.

As it stands, claimants whiplash cases are either diagnosed by their family doctor or an expert recommended by their solicitor. These medical experts receive a £195 fee and according to the MoJ this gives too many people special interests in pursuing whiplash claims.

As systems of accreditations or private contractors to assess whiplash claims will therefore be discussed doing the consultation as the MoJ seeks to ensure that only genuine cases receive damages.

The consultation will also consider increasing the limit for all small RTA personal injury claims to £5000 which would include whiplash claims, rather than increasing the limit for whiplash claims alone to £5000.

Interestingly, two previous consultations in 2007 and 2009 found that increasing the small claims limit was not necessary. However, the MoJ believes that claims can be dealt with more straightforwardly using the small claims track, meaning that cases requiring personal injury solicitors will only be those paying out over £5000.

When the consultation closes in March, its proposals look likely to be followed by changes to the RTA electronic portal making it more difficult to pursue small claims using the portal, but easier to pursue claims up to £25,000

Claims through the RTA Portal – more controversy seems likely

Problem with yet another of the government’s many mooted changes to the legal landscape appears likely with the admission that there are “no guarantees” that the RTA Portal will in fact be ready for the expected significant increase in the number of RTA [i.e. Road traffic act] injury claims from next April.

The chairman of RTA Portal Co [the company which operates the online personal injury claim system], Tim Wallis, commented that there were “no guarantees that the new system would be properly implemented in time for next April’s changes. With effect from next April, the Ministry of justice is to up the current maximum limit on RTA injury claims from £10,000 up to £25,000 – in addition to extending the use of the portal to cover both public liability and employers liability claims as well as road traffic cases.

Mr Wallace went on to describe the circumstances surrounding upgrading and development of new software for the portal as ”challenging”.

Yet again, it looks like this government is, for entirely good reasons, simply trying to do too much too soon. In the meantime personal injury solicitors can do little but simply hope that the specialist software company can in fact develop the changes to the gateway required by next April – though don’t hold your breath.

Road Traffic Accidents Portal -government ignores own expert

The controversy about the proposed changes to the scope of the electronic portal for low value personal injury claims in road traffic accidents continues. The latest development follows the clear advice from Nottingham University’s Professor Paul Fenn in his eagerly anticipated report, when he made clear his belief that any proposed extension to the current portal scheme should only take effect following a complete assessment of the whole small claims process next year. Interestingly, he also added that the government’s current proposals to roll out the portal not only to road traffic accidents but also to employers liability and public liability cases, would have only a very limited effect on claims – on the basis that the vast majority of these sort of liability claims remain contested.

Professor Fenn’s report also noted that the much vaunted RTA protocol had, since its launch in 2010, in fact, reduced the average level of compensation awarded by 6%.

In the report, the professor recommended in particular that the whole RTA portal scheme should be jointly reviewed in 12 months, by which time there will be more data on the portal and its accompanying used of highly restricted fixed costs.

Responding to the report, the government showed no signs whatsoever of following the report’s recommendations or delaying the implantation of its plans to extend the scheme in anyway – in fact, the MoJ commented only that Professor Fenn’s report provided “important groundwork” to its plans to significantly expand the whole scope of the electronic portal fixed costs scheme.

Increase in UK road accident injury claims

Statistics just released by the Institute of Actuaries indicate that the number of UK road traffic accidents which involved some form of personal injury increased last year by a full 18% – and that in contrast, the actual number of compensation claims made dipped by 11%.

These figures prompted a strong response by the Motor Accidents Solicitors Society [ MASS] which claims that the an important factor in the rise was the heightened level of activity by claims management companies [CMCs]. Rounding on the behaviour of some rogue claims companies, MASS chair Donna Scully pointed out that although the Information Commissioner received around 25,000 complaints from the public about unsolicited text and cold calling from certain claims companies over a 12 month period, not a single prosecution was issued as a result. She also supported the suggestion by the Association of British Insurers for a compulsory medical examination of the claimant before any compensation is awarded.

Despite the referral fee ban and crackdown on no win no fee personal injury litigation expected next April, there are, as yet, no plans from the government to clamp down further on rogue claims management companies nor to introduce compulsory medical examinations.

More than one commentator has observed that despite record profits for various insurance companies including LV and Aviva, there is no suggestion that there will be any reduction in insurance premiums. Calls from some quarters of the industry for a complete ban on unsolicited text messaging, cold calls and television advertising for personal injury cases appear to have been ignored by the government.

Have you suffered a UK Road Accident Injury? Call FREEPHONE FREEPHONE 0800 1404544 for FREE compensation claim advice from our specialist Road Accident Injury Claim Solicitors.

Derision at government’s proposed cap on Road Traffic Accident claims

The government’s proposed £300 cap on Road Traffic Accident claims through the RTA portal, an online system which handles routine, low value personal injury claims, have been met with widespread derision across the legal profession.

This slashing of the current legal fee would mean a significant decrease of 75% from the current £1200 cap, itself also a significant drop from the previous rate charged by solicitors which is seen by many as a cut that would not be tolerated in many other industries.

Whilst Bonallack & Bishop enjoys a solid enough reputation to be able to attract high-quality compensation claims and therefore avoid lower level claims work, there are many smaller law firms who may be forced to accept this level of work albeit to be undertaken by junior fee earners or newly qualified and inexperienced staff which will in turn devalue the claims process and industry.

Conversely, insurance companies will fully benefit from the changes and the level of competition could prove untenable with highly qualified lawyers employed by them pitted against inexperienced legal staff in other areas. In other words, rather than a no win no fee result for the consumer, we will soon be seeing a win win result for the insurance companies.

Some claimant personal injury solicitors have also expressed concerns over the potential increase in fraudulent claims whilst others believe that the cuts will give rise to corner cutting and reduced due diligence.

The proposal came to light during roundtable discussions with the justice minister, Jonathan Djangoly, although the Ministry of Justice is insistent that figures have yet to be finalised following stakeholder consultations taking place this month.

Deborah Evans, chief executive of the Association of Personal Injury Lawyers commented that there were ‘cases are diverse and liability is invariably denied, which means automatic exit from the portal…if the portal approach is to be extended, sound evidence must be collected to establish what the work actually costs. The process will need to be mapped, costed and then bespoke portals created.’

Government targets fake whiplash compensation claims

Justice Secretary Ken Clarke this week resumed his crusade against “the compensation culture”, laying into personal injury solicitors yet again. Is it my imagination or whenever governments are doing badly, do they seem to look desperately around for easy targets to attack in order distract the public from the governments own failings. So-called ”fat cat” lawyers are often first in the firing line.

According to the government, the number of whiplash injury claims has risen by 70% in just six years and around £2 billion every year is paid out in accident compensation – with GPs apparently claiming that around 25% of the 600,000 compensation claims made every year are either “fake or overdiagnosed”. This is apparently the fault of no-win no fee lawyers. Firstly, if these cases are overdiagnosed, why is it the lawyers fault – they’re not performing the diagnosis – that’s down to GPs and it is the medical profession alone, which is surely responsible for proper diagnosis. But unfortunately attacking doctors is never politically popular – whereas the lawyer, and the accident claim lawyer in particular, is always a popular whipping boy.

The latest news followed earlier claims by the House of Commons Transport Committee, that the insurance industry or did that they’d felt forced to add around £90 to the price of every insurance policy to pay for these fake claims.

Our view? The government is to be applauded if it does in fact successfully set up an independent panel of medical experts to investigate dubious injury claims. But how about making sure that GPs are properly trained and do properly challenge anyone who they suspect of making a false claim. Without medical evidence no sane personal injury solicitor is ever going to run a case – no win no fee or not.

And finally, if the number of whiplash claims is indeed slashed, are we all really confident that the highly profitable insurance industry is going to generously cut down all our premiums ? Apparently the average premium has doubled since 2008 – that can’t just be down to whiplash claims. Will properly diagnosing fake whiplash claims result in a drop of the insurance premiums we all pay, or will any saving somehow be swallowed up in a rise in insurance industry profits. Only time will tell.

Ludicrous new government plans – will the consumer really benefit?

The government’s obsession with driving down the legal costs of accident compensation claims, regardless of the potential consequences, continues. The latest moves involves a proposal for setting a new rate for the maximum fee for low value road traffic claims that go through what is known as the RTA portal – an online system for the more routine personal injury claims. The cap for legal fees is currently set at £1200 – which was in itself a significant decrease in the rate previous recharged by solicitors. Unbelievably, the justice minister, Jonathan Djangoly, is seriously suggesting that the rate ought to be decreased to just £300. Lawyers are always easy targets – what other industry would be expected to negotiate the possibility of a 75% reduction in income – would they do the same to public sector workers? Of course not.

I have absolutely no problem with the principles of competition, but I think this occasion the government is making major mistake and seemed to be in thrall to the insurance industry. The rationale behind this significant planned intervention into the market, seems to be that insurance premiums are too high. Insurance companies bleat that this is because of the legal costs involved in personal injury claims are simply too high – though if they were more realistic and didn’t fight quite so many understandable accident compensation claims, that would significantly help the issue of costs.

If the government do really reduce the cap on legal fees for the RTA portal to just £300, they will be playing into the hands of the insurance companies. Firms like ours, with top-quality person injury solicitors, will simply refuse to do this level of work.. Fortunately, our reputation enables us to obtain enough good quality work to cut out this lower level – my concern is that the any firms remaining, will only be able to make this kind of injury claim work pay, if at all with the very lowest level of qualified and highly inexperienced fee earner. Insurance companies therefore will have all the advantage – able to employ their own highly qualified lawyers with a limited budget working against inexperienced legal clerks working on a limited timescale. The result – a win for the insurance companies – not the consumer.

Compensation For Whiplash – How Damages Are Calculated

Whiplash is a very common injury in road traffic accidents, so it’s no surprise that it’s an equally common subject for compensation claims. Most people tend to think of compensation as one lump sum, but it’s actually calculated according to a number of different factors. These can be divided into two broad categories – general damages, which are awarded as compensation for the injury itself, and special damages, which are awarded to cover financial loss.

General damages

In looking at an award to compensate you for your injury, your accident claim solicitors will look at the amount of pain and suffering that it’s caused you. This will be influenced by how severe the whiplash injury is, and the length of time it’s caused you to suffer. The award will also reflect any psychological trauma or damage arising from the injury.

The second part of the general damages award is known as “loss of amenity”. This means the effect the injury has had on your life in general. If whiplash has restricted your domestic, social or professional life in any way, then you will receive compensation for it. For example, if you were in the habit of playing 5-a-side football once a week before the accident, and you’re no longer able to do so, this would be classed as a “loss of amenity”.

Special damages

Special damages are awarded in recognition of any adverse effects on your earnings and finances as a result of the accident. Financial losses are obviously easier to quantify than general lifestyle losses , which is why they’re accounted for separately in a Schedule of Loss as part of your injury claim.

Loss of earnings is the most apparent form of financial loss, so if your whiplash injury has caused you to take time off work and lose pay, this will be reimbursed in the final settlement. You can also claim back the time for anybody who has had to care for you, at an hourly rate, as well as claiming for any treatment that you’ve had to pay for privately. In the same way, it’s possible to claim for anything you’ve had to pay out for as a result of the injury, such as phone calls to medical specialists, travel costs to hospital or solicitor appointments, prescription costs, postage of documents and so on. For this reason, it’s vitally important to keep track of all your expenses.

Whiplash injury compensation, then, is designed to reimburse you if you’re out of pocket, and to provide redress for a diminished quality of life.

Our personal injury solicitors offer free initial phone advice, no win no fee agreements and a free first interview –hospital or home visits are also available for accident claims. Why not contact us today on FREEPHONE FREEPHONE 0800 1404544.