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Could 'Unfair' Proposals Affect Road Traffic Accident Victims?

View profile for Kay Ditcham
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The Civil Liability Bill had its second reading in the House of Lords recently, and one of our North East firm's partners, Kay Ditcham, has been looking at how it could affect those involved in accidents out on the roads.

The Bill, amongst other things, purports to prevent unmeritorious or fraudulent claims arising out of road traffic accidents by capping the amount of damages that an injured party will receive for a soft tissue (whiplash) injury.

Needless to say this is a Bill which is supported by the Association of British Insurers amidst suggestions that there are large numbers of unmeritorious claims being made each year.  This suggestion is made without any substantive supporting evidence whatsoever, and in fact the number of claims made in relation to road traffic accidents is at its lowest for a decade, according to the government body, the Compensation Recovery Unit.

The Bill proposes a tariff for whiplash injuries, where compensation will start at just £225.  This amount would apply to injuries lasting 0-3 months, which would presently attract an award of around £1,750 according to industry data.  Unbelievably, the tariff purports to include an element for psychological injury as well as the soft tissue injury.

In addition, it is proposed to increase the small claims limit to £5,000 in road traffic accident cases and £2,000 in all other injury claims.  This seems to be manifestly unfair.  It would seem to be reasonable to increase the small claims limit in all injury cases to the same figure but it is difficult to see how it can be justified to have potentially two Claimants with identical injuries sustained in different types of accident, where one will be below the small claims limit and the other will not.  The effect of raising the small claims limit is in effect to restrict a Claimant’s ability to recover the cost of legal representation for claims which fall below it.  So, a Claimant who is injured due to another driver’s negligence, could be unable to work for a period of time and restricted in their day to day life will not be able to recover the cost of legal representation and may be entitled to receive only £225 in compensation, yet an individual who suffers the same injury in say an accident at work will recover compensation of over £2,000 and will be entitled to recover their legal costs.  This would appear to be illogical and unfair.

This Government appears to be submitting to pressure from the insurance industry, who will be the only winners if this legislation is passed.  The insurance industry representatives have been attempting to sell these reforms to the general public by suggesting that motor insurance premiums will be lowered as a result.  This is in my view highly unlikely, particularly given that legal costs arising out of road traffic claims have been reduced several times already over the last few years, with none of the promised savings having been passed onto the consumer to date.  The purpose of motor insurance is meant to be to compensate those affected by another’s negligent driving, but the insurers appear to have lost sight of this and seek only to make a significant profit out of it.

The reforms are likely to be introduced as early as 2019, but it is not too late to prevent them from taking place.  If you wish to do so I would suggest you contact your MP as soon as possible.