For the past few years, the insurance industry, Government and media have suggested that the country has a growing compensation culture and have taken measures to stop what they perceive as ambulance-chasing Claimant lawyers.
In April 2013, the Jackson reforms will come into place, which are aimed at tackling some of those issues with personal injury cases, including banning Claimant solicitors paying referral fees to insurers and claims management firms for files and stopping them being able to recover success fees and After The Event insurance premiums from the Defendant insurers.
Many of the claims now presented after Road Traffic Accidents are for whiplash-style injuries and over the past few years there have been a number of debates between the legal industry, insurance firms and the Government as to the best way to deal with these cases.
It has been suggested that in many whiplash claims the injuries are for 12 months or less and that the compensation recovered for the Claimant is often similar to the costs being sought by the solicitors.
The insurance industry has long reported that the costs of meeting these cases has increased substantially over the past decade or so, to a reported £2 billion per annum and that in dealing with such claims the whole population has to pay increased motor insurance premiums.
Claimant solicitors have argued that the increase in cases is due to a heightened awareness of injured people that they can make such a claim and that having a solicitor involved ensures that there is access to justice for all and that the Claimant receives the treatment they require and a fair settlement.
Insurers have also suggested that due to the volume of such cases, apparently 1,500 per day, there are a few fraudulent Claimants who are able to exploit the system and make false claims.
Obviously such conduct cannot be condoned and this week it has been announced that the Justice Secretary Chris Grayling is introducing a Parliamentary consultation with the intention of introducing an independent panel to assess whiplash injury claims, allowing genuine Claimants to proceed with their cases, but stopping false claims in their tracks.
It will be interesting to see how this will work in practice and who will make the decision that a Claimant is making a genuine claim or not. Also, it could take some time for insurers, solicitors and Government to reach agreement as to how to implement such a scheme which balances up the interests of the Claimant and the insurer.
The consultation also includes a less-well publicised area, however, one which could have larger implications. This surrounds a potential increase in the Small Claims Track injury limit from £1,000 to £5,000. Most whiplash injuries would fall within this bracket and if approved, solicitors would only be able to recover fixed costs in dealing with such matters, making it uneconomic for them to accept such cases.
What is clear is that over the next few years there will be substantial changes in this area of the law and whether these are to the benefit or detriment of Claimants, the lawyers or the insurance industry remains to be seen.
For more information and independent advice on personal injury claims and how Blacks can help, please contact Nathan Clay of the Personal injury Department of Blacks Solicitors LLP.
DDI: 0113 227 9355