COMMONS

Reforming the claims process for soft tissue injuries (whiplash)

07 February 2017

The Justice Committee explores the differing views of the Association of British Insurers (ABI) and the Association of Personal Injury Lawyers (APIL) on the proposed reforms to the claims process for personal injury.

Reforming the claims process

In November 2016 the Ministry of Justice published a consultation paper setting out proposed reforms to the claims process for personal injury, in particular road traffic accident (RTA) related soft tissue injuries claims. Many of these claims are for injuries causing neck pain, or 'whiplash'.

The purpose of this evidence session is to air in public the principal arguments about the Government's proposals. It is not intended to be an exhaustive examination of these proposals or a re-run of the Government's consultation. The Committee is not seeking any further written or oral evidence and is not intending to produce a report.

The main proposals included:

  • Removing or limiting compensation for 'pain, suffering and loss of amenity' (PSLA) for injuries of short duration
  • Imposing set compensation tariffs for injuries of longer duration
  • Raising the small claims limit for all PI claims from £1,000 to £5,000 (the claimant cannot recover legal costs for a small claim)
  • Requiring medical evidence before settling claims for whiplash and other RTA soft tissue injuries

These were welcomed by the Association of British Insurers which said that the estimated £532million savings would be passed on to consumers in the form of reduced insurance premiums. But the proposals attracted strong criticism from Association of Personal Injury Lawyers, particularly of the proposal to raise the small claims limit which they argued would prevent claimants from getting legal advice in a complex area.

Witnesses

Tuesday 7 February 2017, Room 16, Palace of Westminster

At 9.45 am

  • James Dalton, Director of General Insurance Policy, Association of
    British Insurers
  • Neil Sugarman, President, Association of Personal Injury Lawyers

Background

The House of Commons Transport Committee considered this issue in 2013, when the Ministry of Justice consulted on raising the small claims limit for PI claims. Its report Cost of motor insurance: whiplash did not support the proposal at the time, because of the possible negative impact on access to justice and potential new opportunities for claims management companies. The Committee recommended that the electronic portal for processing claims be evaluated before making any changes, and in the wake of this report the Ministry did not raise the small claims limit, accepting that adequate safeguards to protect claimants would be needed.

Further information

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