In a direct attempt to drive down the growing volume of whiplash related claims, the House of Commons have voted in favour of the Civil Liability Bill on its Third Reading. As part of the package reforms, it would appear that the Governments proposal to increase the Small Claims Limit in claims for compensation arising out of minor Road Traffic Accidents from 1,000 to 5,000 may be a reality come April 2020.
In a legal landscape where personal injury is plagued by fraudulent whiplash claims, phantom passengers and exaggerated injuries have become a huge concern for the Government and Insurance Companies alike. Adding to these concerns are the aggressive tactics used by Claims Management Companies to encourage people to exploit the current system.
The Courts have partially addressed this issue by increasing the use of sanctions resulting from a finding of fundamental dishonesty under s57 of the Criminal Justice and Courts Act 2015. This provision was recently utilized by Ellisons in the case of Boon and Others (unreported), where we successfully convinced the Court that 19 Claimant’s who all alleged to be injured on board a coach on a ‘Stag Do’ were fundamentally dishonest. The inconsistencies in their evidence enabled the Judge to agree with confidence that their claims were unmeritorious, and as a result each Claimant was found liable to pay 2,000 in legal costs.
By increasing the Small Claims Limit from 1,000 to 5,000 for RTAs, it is unlikely that those seeking to recover for whiplash injuries will have legal representation. Furthermore, the Bill cracks down on exaggerated injuries by placing a ban on settling whiplash claims without medical evidence.
The reforms are set to receive a warm reception from the Insurance Industry, as it is estimated that they will make savings of 1.3 billion every year. Consumers have placed mountainous pressure on Insurers to reduce prices, as car insurance premiums have increased by 8% since 2016. Therefore, the Government have estimated that around 80% of the money saved by the Insurer will be returned to the consumer in the form of reduced premiums. Whilst the effect of the reforms might not be seen immediately, the savings predicted will enable Insurers to redirect their attention away from unmeritorious claims and place their priority back on the everyday consumer.