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Whiplash reforms scrapped: industry reacts

Whiplash reforms scrapped: industry reacts

Whiplash reforms scrapped: industry reacts The insurance industry has been reacting after reports broke in The Times yesterday that proposed reforms on personal injury claims have been scrapped.

Reports suggest that ministers are “unenthusiastic” about the proposals, although the reforms are also said to be “certainly not off the agenda”.

Originally proposed last November, the reforms would have brought a halt to cash compensation for short-term, minor injuries. They would also have limited the involvement of lawyers in such cases, in an effort to reduce the number of false personal injury claims that have led to spiralling car insurance premiums.

In an immediate reaction, the Association of British Insurers issued a response claiming the delay could cost British motorists around £3 million and that ‘ambulance chasers’ are “laughing all the way to the bank.”

“The Ministry of Justice seems to be rowing back from much needed reform to the civil justice system that will save motorists up to £50 a year on average,” said James Dalton, director of general insurance at the ABI. “The UK has one of the most abused systems in Europe and the reforms would tackle the excesses of the compensation culture. Without action, claims management companies will continue to nuisance call and text honest motorists encouraging them to make fraudulent and exaggerated claims through claimant law firms.

“Every day of delay costs honest motorists across the UK nearly £3 million. The plans are drawn up and ready to go so there is no excuse for not pushing ahead.

“If the Ministry of Justice delivers on its promises, millions of honest customers will be better off. If they cave in to the vested interests of the ambulance chasers and cold callers, those businesses will be laughing all the way to the bank at the expense of honest motorists.”

Alistair Kinley at insurance and risk law firm BLM believes that some delay was inevitable given the recent Government shake-up – but that insurers shouldn’t panic with the reforms likely to stay on the agenda in the long-term.

“Brexit will have reset many of the Government’s priorities: it’s naïve to think otherwise,” he said.
“Key Ministers behind the personal injury reforms proposed in last year’s Autumn Statement have moved on. While there is nothing official yet about those proposals proceeding or stalling, the need to shine a light on murkier aspects of the claims industry hasn’t gone away.

“There is significant activity on many fronts: recommendations from the Insurance Fraud Trask Force to tackle late notified claims have widespread support, as has tightening the regulation of claims companies by bringing them under FCA control; the Solicitors’ Regulation Authority is carrying out a thematic review of the personal injury sector and will report in early next year; and extending fixed legal costs is firmly back on the MoJ’s to do list.”

Meanwhile, Andrew Twambley, spokesperson for Access to Justice, described the shelving as “a victory for common sense.”

“The MoJ decision not to proceed with reforms to personal injury is a victory for common sense,” he said. “There was no evidence that the reforms would work, and it was not clear whether customers would benefit in the form of lower premiums.
Moreover, if passed into law, the reforms would have eroded the rights of millions of people access to gain redress for their injuries.

“Nevertheless, all sides accept that there is an incentive to get rid of cold calling, cut down on fraud and frivolous claims, and operate a more efficient claims process which has the customer front and centre.”

Where do you stand on the reported scrapping of whiplash reforms? We would welcome your comments below.

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