Compensation reform ‘penalises the majority’ – lawyers

Compensation reform ‘penalises the majority’ – lawyers
More than half a million genuine claimants for road accident compensation could end up short-changed as a result of a government crackdown, a lawyers group says.

In a bid to eradicate so-called ‘compensation culture’ by tackling bogus whiplash claims, the Conservatives used the Queen’s Speech to introduce changes to the payout system.

The plan is to increase the minimum court claim for compensation to £5,000, from the current £1,000. But by doing so, personal injury lawyer foundation Access to Justice believes as many as 600,000 people every year may miss out on a fair settlement.

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Under the new proposals, newly-imposed tariffs would dictate the amount of compensation received by successful claimants.

Access to Justice argues the plans “penalise the majority”, noting
that many of those making bona fide claims under the system would be excluded from a fair deal – and would also have to pay their own costs if they wanted to contest the action in court.

Capital Economics research found that around 80% of successful claims (600,000 cases) each year are settled for under £5,000, with the average being £3,000.

The Ministry of Justice wants to remove access to legal costs for cases worth less than £5,000, in a bold attempt to dissuade fraudulent whiplash claims – so long the scourge of the insurance sector due to difficulties in disproving the injury.

It says the planned reforms have the potential to take about £35 off the average car insurance premium.

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But Access to Justice spokesman Andrew Twambley says: “We all want to stop people gaming the system, but the government’s plans are totally unjustified and wholly indiscriminate.

“Any solution should penalise the minority, not the majority,” he added.

The foundations says the lower cap for access to legal costs should be £2,000. This would still mean around a quarter of the most minor injury cases would not qualify – saving up to £400 million in claims each year.

Plans for personal injury reform would require legislative change, and a Civil Liability Bill is expected to be pushed forward later this year.

Copyright Press Association 2017. Motoring News articles do not reflect the RAC's views unless clearly stated.