The Government acts quickly to start cutting back on the 'compensation culture'
The Ministry of Justice, on 23 February 2017, published Part One of its response to the ‘Reforming the soft tissue injury (‘whiplash’) claims process’ consultation which closed on 6 January 2017. (We have never seen the Ministry of Justice move so quickly! Ed.) The reforms will cover Road Traffic Accident (RTA)-related whiplash claims and minor psychological claims. Ministers made the following policy decisions:
- to introduce a tariff of fixed compensation for pain, suffering and loss of amenity (PSLA) for claims with an injury duration less than 24 months - those with the most minor injuries arising from an RTA will receive just £225 in compensation;
- to allow judges to both decrease the amount awarded in cases where there may be contributory negligence and to increase the award (by no more than 20%) in exceptional circumstances;
- to introduce a ban on both the offering and requesting of offers to settle claims without medical evidence; and
- to increase the small claims limit for RTA-related personal injury claims to £5,000.
The industry has until October 2018 to prepare for these reforms. With the small claims limit being raised to £5,000 and so placing such claims on the small claims track, lawyers are going to lose a significant caseload. But we need not worry. The ‘government is of the view that low-value personal injury claims are not so complex as to routinely require a lawyer. Raising the small claims limit to cover PSLA claims of up to £5,000 will not preclude claimants from engaging legal representation, but would mean that they would in future be responsible for paying for their own legal costs if they so choose.’