Both underwriters and claims professionals are bracing for the Whiplash Reforms that are set to be introduced in April 2020. The Whiplash Reforms are a package of measures introduced by the government to reform the way low-value personal injury claims arising from road traffic accidents are handled.
It will be interesting to see if the new measures put people off claiming for relatively minor motor accident injuries. Online crowd-funding sites such as Go Fund Me, or Facebook appeals may well rustle up the necessary funds for claims which have public sympathy. Some media outlets may see this as a chance to score points against the Tories and offer help in particular cases, or campaign for a rollback on the reforms.
According to the Ministry of Justice the reforms will “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.” If that saving can be delivered, then most people will have no issue with the system, but if there are website portal problems, or people feel priced out of a system which is now reserved for the rich, there will be political trouble by this time next year.
David Williams, interim chairman of the Society of Underwriting Professionals, said underwriters need to make sure they are on top of the changes plus work to report the savings these deliver for consumers.
Mr Williams said: “With motor (insurance) pricing being a complex area, separating out the impact of just the legal changes might prove much more difficult than I think the government is expecting.”
The reforms will reduce the financial compensation for injury by setting a fixed amount payable for injuries lasting less than two years and reduce the amount an insurer must pay in costs by increasing the small claims track limit from £1,000 to £5,000 for road traffic accident related claims.
For employer’s liability and public liability the limit is lifted to £2,000.
Sue McCall, chairman of the Society of Claims Professionals, said: “The headline result of this increase is that those claims valued below the new limits will no longer result in costs recovery.
“The expectation is that there will be a far greater number of litigants in person. This will bring with it the need for more time spent per case in explanation and communication.”
Ms McCall, who as well as being chairman of the Society of Claims Professionals is head of claims at Aspen Risk Management, said the profession should note that a portal for whiplash claims is being developed and expected to be in place by April 2020.
She said: “We may see a surge in reported motor claims ahead of the reforms, as we did prior to the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.”