What consequences will the proposed government changes on capping whiplash damages for personal injury claims have on the legal profession? Well, according to a new survey by claims management company, First4Lawyers, the ramifications could be severe. Its research found that, should ministers push ahead with the proposed reforms, a considerable number of firms will either have to close their personal injury departments or shut down their whole practice entirely.
So what exactly did the First4Lawyers survey discover? Well, the survey found that of the 71 firms polled, 29 intended to close down if the small claims limit was increased to £5,000 for all personal injury claims. A further 17 firms polled said they would only survive the proposed changes if the increase was only limited to RTA claims. Only a minority felt they were sufficiently diversified to survive, and an even smaller number believed the changes would bring new advisory opportunities in the small claims arena.
The government has announced that it intended to close its consultation period on the proposed changes to the cap on whiplash damages and scrapping of pre-medical offers on 6 January. Yet the First4Lawyers survey found that fewer than half of the firms affected by the proposals intended to make representations to the consultation.
Speaking about the survey’s results, Qamar Anwar, managing director of First4Lawyers, said:
‘This is a moment of existential threat for many law firms. The government needs to understand that in its pursuit of a mythical £40 off motor insurance premiums, it is stripping the injured of their rights to justice and causing serious damage to thousands of hard-working professionals who are doing no more or less than upholding the law of the land.’
Further criticism of the proposed personal injury claims changes has been directed at the MoJ by Hull firm, Hudgell Solicitors. The firm has attacked plans to restrict the links between legal services providers and rehabilitation providers. Although the government has insisted that these plans will reduce car insurance premiums, the firm has accused the government of hiding away references to rehabilitation within the consultation document. The document does introduce the idea of issuing vouchers for rehabilitation and restricting claims to victims who have sought medical attention within a specific time: however, it fails to make any reference to the Rehabilitation Code – a voluntary framework drawn up by the entire claims industry.
Speaking to the Law Society Gazette, Amanda Stevens, group head of legal practice at Hudgells, said:
‘All sides of the personal injury industry have co-operated to create a way of delivering rehabilitation that works for the injured person first and foremost, but also the paying party, lawyers and providers.’
‘Making the code a compulsory part of the claims process will ensure that best practice is adhered to by all, without the need for the Ministry of Justice to take risks with the recovery of claimants from their injuries.’