Date confirmed for whiplash reform bill

Date confirmed for whiplash reform bill

28th March 2018

The Civil Liability Bill – aka the Whiplash Reforms – have finally been introduced to Parliament, and are expected to be passed into UK law by April 2020.

The controversial bill, it is claimed, will reduce the cost of insurance premiums by an average of £35 by supposedly eradicating fraudulent whiplash claims.

It aims to do this by raising the small claims limit to £5,000 – litigants making claims under that threshold will not be able to claim for legal costs.

The Ministry of Justice has published an impact assessment for the bill, with the main focus being on the way it will affect the personal injury legal sector.

It is projected that claimants will lose £990m a year in lost compensation claims, while the PI sector itself will lose £80m per year in fees.

The impact assessment said: “As is standard practice in an IA, it has been assumed that the loss in revenue will be offset by a reduction in the work conducted. Therefore it has been assumed that claimant lawyers would be able to redirect their resources for productive uses elsewhere in the economy of equal or next best economic value.”

The IA was based on a series of assumptions. Data from the Compensation Recovery Unit said there were 705,000 settled road traffic accident claims in 2016/17, of which 540,000 involved a payout. The MoJ estimated that all but 20,000 of these related to soft tissue injuries.

It projected that 50% of claims with an injury duration of up to six months would continue after the reforms came in, along with all of those lasting more than six months. This would mean 133,000 cases not proceeding on current volume.

[Note that blog has been updated to reflect a revised introductory date]