The government this week confirmed that it is still minded to follow through with pre-election pledges relating to the personal injury sector.
The Ministry of Justice is already working on the Civil Liability Bill to reinstate proposals on a fixed tariff for low-level road traffic accident claims. These reforms were part of the Prisons and Courts Bill which ran out of time before the election.
Justice minister Sam Gyimah has now confirmed in answer to a written question that the tariff will apply to all compensation for whiplash claims for injuries lasting up to two years.
Gyimah answered any doubts over the pre-election vow to increase the small claims limit, adding that primary legislation 'will be supported by further secondary legislative changes to the Civil Procedure Rules to increase the small claims track limit for road traffic accident related personal injury claims to £5,000, and for all other personal injury claims to £2,000’.
The package of reforms was due to be implemented as a whole in October 2018, but the government has yet to confirm whether that timescale remains in place.
Meanwhile, the Association of British Insurers today said that motor premiums have increased by an average of £48 compared with this time last year, hitting a new record high of £484. This 11% increase is around four times the rate of inflation, the ABI noted.
The cost of car insurance is one of the key drivers for personal injury reform, with the government suggesting that cutting claims numbers could save each motorist an average £35 a year.
The ABI said the rising costs enhance the case not just for whiplash reform but for a realignment of the discount rate, the level at which claimants’ damages are reduced to account for inflation on their investments. The previous justice secretary Liz Truss changed the rate to -0.75% earlier this year, and the revised level will be debated in the House of Lords today following one peer’s Motion of Regret at how it was introduced.
ABI director general Huw Evans said: 'The UK is one of the most competitive motor insurance markets in the world, but the unprecedented increase in claims costs is driving up prices to record levels.’