Government response to the whiplash consultation

“If you are walking down the right path and you’re willing to keep walking, eventually you will make progress.”

Barack Obama

Evolving from a specific response to stakeholders into much broader feedback to both stakeholders and the Transport Select Committee (TSC), the Ministry of Justice's (MoJ) long awaited response to the whiplash and Small Claims Track (SCT) consultation was finally published on 23rd October.

Whilst quite robust on what was, and what was not, in scope going forward, the paper was typically light on detail and substance. Whilst such design must be awaited, for now the clear priority is to move, “at pace,” to create an independent and accredited medical panel for the provision of road traffic accident (RTA) soft tissue injuries. The MoJ have been careful not to limit this to ‘whiplash’ injuries alone, and they recognise the threat that injuries will subsequently manifest themselves as 'shoulder' or 'back' symptoms.

Importantly, the Government also wish to address the links which may impair the independence of medical examiners so they are not paid by those who favour a certain outcome. This is a critical and crucial nuance to the debate and it will be interesting to see how those who own both law firm and medical agency will respond.

We also want to see how ancillary issues such as rehabilitation and psychologist reports are to be bought into the discussion. We are seeing a great deal of activity here; with layering of disbursements and certain claimant law firms now submitting psychologist reports in nearly 100% of cases. We may already be moving from having the weakest necks to having the weakest fortitude, but where there is an opportunity to build cost…

Overall, the medical reforms are to be welcomed but, as ever, the devil will lie in the detail.

The SCT is to remain at £1,000 for personal injury claims. The Government (as did the TSC) found good arguments for extending the limit but have decided against an increase - for now. The door is clearly still ajar and we would anticipate that the issue could be re-visited in a future Parliament if the broader package of reforms fail to deliver premium reduction. Claimant lawyers’ hailed this decision as 'a victory for common sense'. Their relief was palpable, but perhaps not as much for future clients as they may have us believe as they are not now to be plunged into a DBA market where they would have to compete against CMC’s to capture and present claims.

So why did the Government decide against an increase?

I think there were a number of reasons why they arrived at their final decision. Firstly, a very broad package of measures have been implemented over recent months. The MoJ want to assess the impact of these prior to taking a further, and what some may consider, draconian step toward greater intervention. There was also some concern over access to justice but in this post-LASPO world of personal injury DBAs, that still feels unfounded. CMCs and law firms would still exist to bring such claims and claimants would lose up to 25% of their damages - but is that not where we are already?

There was certainly concern over re-igniting the personal injury CMC market. The CMRU have made great strides in regulating and controlling this arena and an increase in the SCT would most likely have seen fresh impetus given to this market.

Finally, Government are seeing motor insurance premiums reducing. Only this month a study indicated that premiums have reduced by some 12% over the last year. It was unsurprising to see the Government take credit for that and point to their reform package but clearly it is far too early to say that reforms that were only delivered in April and July are affecting overall indemnity spend by October. Underwriters may be reducing premium in anticipation of savings, but with rapidly changing tactics and behaviours from claimant lawyers we feel that it is still too early to make a call on either frequency or severity.

The last point of note from the response was centred around data sharing. The Government strongly encourages the insurance industry to share data on potential fraudsters with claimant lawyers to help stop such claims at source. The vision is that claimant lawyers could carry out “know your client” checks via, presumably, on-line access to some central data repository which would either red or green flag a claimant.

We fully support any measure that will help tackle insurance fraud but would sound a strong note of caution on the Government’s proposal.

Such an approach could be fraught with difficulty and open to both challenge and abuse. As leaders in counter-fraud, we know only too well that it is the human interpretation of the data that really counts and we work hard with clients to avoid “false positives.” Such an idea needs considerable care and thought and we will engage both clients and the MoJ on this difficult issue.

Overall, we have taken a few more steps along that ‘path to progress’. Our concern however, is time.

Working back from a general election in May 2015, the MoJ probably have 12 months - at best - to effect changes to the medical process. To quote the response, and if we are indeed to travel along the path, then we must do so, “at pace.” It is for all stakeholders to work with and support the MoJ in delivering a transparent, independent and accredited medical process which in itself will go some way to defeating insurance fraud which of course drives up premiums for us all.