WHAT JUST HAPPENED?

As of 1st June 2021, the Whiplash Reform Programme came into force, attempting to “tackle the high number and costs of whiplash claims and the impact these have on the cost of motor insurance premiums.”1

WHAT DOES THIS MEAN?

The programme includes multiple changes to the whiplash claim system, including introducing a new fixed tariff for compensation and a ban on settling whiplash claims without medical evidence.

Also, the Small Claims Track limit for Road Traffic Accident-related personal injury claims has been increased to £5000, meaning that the majority of these claims will progress through the Small Claims Track, where legal costs expended are not recoverable. 2

HOW DOES THIS IMPACT THE LEGAL SECTOR?

Whiplash injuries have been exploited for a considerable amount of time, and according to the Association of British Insurers, Britain is “the whiplash capital of the world, where 78% of car accidents in the UK are such that the drive accepts liability-involving compensation for whiplash.”3 The issue of false claims seems to be on the rise, as “43% of physicians claim they frequently see suspected feigned injuries compared to 25% in 2009.”4

Fraudulent claims have a huge impact across multiple sectors including the NHS, with an estimated million hours being used to treat fraudulent whiplash patients,5 taking time away from those patients in need. Furthermore, it creates unnecessary extra work for law firms, insurance companies and increases the costs of car insurance for honest motorists.

These concerns may appear to be placated with the introduction of the Whiplash Reform Programme; however, some suggest that the reforms may not actually reduce the success of fraudsters. Gary Petterson, head of the counter fraud services for national law firm Plexus Law welcomed the reforms, but “warned that fraudsters will change and evolve”.6

Petterson and others believe that while the whiplash reforms may help, there is likely to be an increase in claims for other injuries not covered by the reforms for example “wrist injuries, tinnitus and significant psychological damage.”7

The removal of claiming legal costs for personal injury claims, suggests that there may be a drift toward public liability claims which are not subject to the fixed compensation or the removal of the claim of legal costs.

This insight suggests that although the reforms appear to, and hopefully will have, a positive impact on reducing fraudulent whiplash claims, the reforms are too narrow to actually remove the huge pressures on the medical and legal sectors that fraudulent road traffic accident claims create.

This could mean that over the coming months and years, instead of seeing the hoped-for reduction in fraudulent claims, the fraudsters will just adapt and abuse other areas in attempts to claim large sums of money.

This could continue to result in unnecessary workloads for many in the legal sector and require legal professionals to educate themselves on the new types of fraudulent claims that are likely to arise. These fraudulent claims waste money and time but tend to increase in times of national financial struggle, and therefore this could be a very prevalent issue in response to the pandemic and its effect on the economy.

Overall, whilst the Whiplash Reform Programme is a very positive step in the right direction, more needs to be done across the board in attempt to crack down on fraudsters making Road Traffic Accident claims, to halt the abuse of money and time for those across the medical and legal sectors.

ASSESSING FIRMS:

#Irwin Mitchell #Slater Gordon #Field Fisher #First4Lawyers #Anthony Collins

REFERENCES:

[1] <https://www.gov.uk/government/publications/whiplash-reform-programme-information-and-faq>Accessed 4th June 2021

[2] Ibid

[3] Insurance Factory, ‘False Whiplash Claims on the Rise’ <https://www.insurancefactory.co.uk/news/March-2015/false-whiplash-claims-on-the-rise> Accessed 10th June 2021

[4] Ibid

[5] Ibid [n3]

[6] John Hyde ‘Fraudsters will ‘evolve’ after whiplash reforms says insurance lawyer’ (The Law Society Gazette, 4th June 2021)< https://www.lawgazette.co.uk/news/fraudsters-will-evolve-after-whiplash-reforms-says-insurance-lawyer/5108739.article > Accessed 12th June 2021

[7] Ibid

Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.