The Ministry of Justice will reveal plans for the second part of an overhaul of personal injury claims by the end of the year, it has been confirmed.

Justice minister Paul Maynard, answering a written parliamentary question this week, said the government is still considering the issues raised in part two of the consultation paper Reforming the Soft Tissue Injury (whiplash) Claims Process. The intention is now to publish a response by the end of this year.

Part one of the consultation has already been enacted through the Civil Liability Act, which will reduce RTA damages through a tariff of compensation levels. But part two could potentially have an even greater effect on the sector, given the wide range of topics covered.

The original consultation asked for views on credit hire, early notification of claims, rehabilitation, recoverability of disbursements and the potential introduction of a new, less adversarial approach to PI claims.

At the time of the consultation, the MoJ made it clear the reform programme was about not just tackling fraud but also dealing with the costs arising from minor claims.

Credit hire and rehabilitation, in particular, are often cited as irritations for the insurance industry, which says costs have spiralled out of control.

In its consultation response, the Association of British Insurers said rehabilitation was not necessary or appropriate in every case, and it was often used a means of deriving additional revenue for commercial enterprises.

The ABI response added: ‘As with credit hire, the overall effect of this approach is to relegate the interests of the claimant themselves behind various commercial organisations using their low-value injury claim as a means to gain access to the market.’

The ABI also proposed in relation to part two that if a claim was notified within one month of an accident, insurers would meet the disbursement costs; later than that, the claimant should meet the cost.

In its response, the Association of Personal Injury Lawyers said such a system would encourage CMCs to hound potential claimants, and create potential injustice for victims who made late claims for legitimate reasons.

APIL added that proposals for rehabilitation could make it difficult or impossible to access.