The problems with whiplash reforms

After the most recent delay to the government’s whiplash reforms, the updates to the Civil Liability Act are now finally expected to come into effect in May, to the disappointment of many who believe that the MoJ still has not considered every potential issue.

The reforms are intended to reduce the costs paid out for minor whiplash injury claims from road traffic accidents (RTAs) by setting a fixed tariff for damages and raising the Small Claims Limit to £5,000. This means that such claims will be handled by a universal online portal and not by personal injury law firms, which of course will have a major financial impact on businesses that deal with these claims and could result in job losses across the sector.

At Accident Claims Lawyers, thanks to a robust long-term business strategy put in place by our leadership team, we’re in a strong position to deliver sustainable growth despite the upcoming reforms. But for many businesses in the personal injury sector, the lack of clarity behind these reforms is set to cause serious difficulties in the coming months.

Find out more about the reforms and their impact here.

The changes will reduce the value of RTA work for legal businesses, particularly affecting smaller firms who may be pushed out of the market entirely, leaving the space open solely for businesses who can operate on a large scale. Qamar Anwar, managing director of marketing collective First4Lawyers commented:

“Some of our member firms have told us they are leaving RTA altogether, while others may offer a limited service, assisting claimants through the portal for a small fixed fee, but without offering advice and guidance. A number have still to decide.

“But one thing we know for sure is that post-reform RTA work will offer limited revenue opportunities and very small margins.”

Aside from the business impact, the larger problem is of course with the client: the injured party who may not be getting as good a deal from these reforms as the government claim.

For starters there is still a lack of transparency towards the tariff of damages to be awarded to whiplash victims under the new measures, and little attempt at raising public awareness of what will and won’t be covered by the new portal. In other words: someone involved in a road traffic accident may not know what they can claim for, what compensation they’re entitled to, how they approach getting it or whether or not they actually need legal advice.

The proposed portal also suffers from a lack of an option for alternative dispute resolution (ADR), so anyone with a whiplash claim that is contested by the other side is reduced to just two options: abandon their claim or face a long wait for a court hearing.

Rather that streamlining the process for claimants, the reforms could well make it more confusing for them, resulting in many people looking for alternative solutions or simply giving up and missing out on the compensation they are entitled to.

These are just some of the problems raised with the MOJ by the Association of Consumer Support Organisations (ACSO) for resolution within the next three months. But even if answers are provided for these (and many other) issues, there is simply too short a timeframe for companies in the personal injury sector to implement the necessary business changes. Businesses need full clarity up front in order to be able to properly advise accident victims and so far they have not been given that.

The whiplash reforms and client portal may have some benefits, but only if it is done right. When the reforms come into effect in May we are not likely to see those benefits, but rather a damaging blow to the personal injury sector, a prolonged period of confusion and complication for RTA victims, and a disastrous influx of unnecessary and unresolvable cases for the courts.

Accident Claims Lawyers

Accident Claims Lawyers is the new name for SGI Legal. We’ve been providing personal injury support for RTA and non-RTA victims since 2012 and are continuing to successfully support thousands of claimants across the UK beyond the introduction of the whiplash reforms.

If you’ve been injured in a recent accident, contact our legal experts today for a free initial consultation to find out what your claim could be worth.