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Keoghs Insight

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Samantha Ramen

Samantha Ramen

Partner

T:07713 393534

General Election 2019: Purdah and its impact

Client Alerts01/11/2019

How will restrictions on government communication affect whiplash reform?

Last week we asked whether a General Election was inevitable, and this week the answer came back: a resounding yes.

With the country set to take to the polls for the third time in under 5 years, the uncertainty surrounding the UK’s government and its relationship with the EU is set to continue for at least the short term.

And with the government (separate in this case to the Conservative Party) bound by law to restrict its communication as a result of “Purdah” controls – restrictions on government announcements of political significance during the pre-election period - this uncertainty is sure to spread to the progress of whiplash reforms as well.

With these types of reform, industry asks for two things: stability and communication. Unfortunately, it now appears that whiplash reform will have neither. At a key time in the process of whiplash reform implementation, the Ministry of Justice and its delivery partner the Motor Insurance Bureau have both confirmed that purdah means they can’t send out communication on the progress of the reforms.

The concern is that we’re at a point now where communication is vital. It is not simply a question of integrating with the new portal once it is launched.  Claims will need to be channelled via the correct route to the relevant team(s) in order to ensure smooth and effective claims handling.

Clarity is also required on which claims will follow which route, whether claims that fall outside the new portal will fall into the existing portal - or outside the portals completely - and whether the existing portal will be modified to accommodate them. For example:

Minors/protected parties

  • Will claims from minors and protected parties fall into the existing portal, even if they may potentially – on tariff – fall below the current SCT limit?

Vulnerable road users (VRUs)

  • Will claims from VRUs fall into the existing portal, even though such claims will be subject to the new SCT limit?

The Existing Portal

  • Will the rules be amended to enable the existing portal to accommodate claims that fall within the SCT limit, and which currently fall outside the portal? or
  • Will the existing portal be modified to accommodate different SCT limits, different bases for quantification of damages or different provisions for recoverability of legal costs?

No man’s land…?

  • Will all claims for post-implementation accidents that fall outside the new portal but fall within “a” SCT limit (whether the existing limit for minors/protected parties, or new limit for vulnerable road users) fall outside either portal?

Until that clarity is provided, compensators and their suppliers – and indeed claimant representatives - cannot undertake the relevant operational planning and structural changes that will be required to put the genuinely injured claimant at the heart of the process, whilst ensuring operational efficiency in claims handling.

That will take time – and unless all sides of the industry receive the necessary clarifications and certainty immediately then they simply cannot be expected to be ready for an April 2020 deployment.

Updated: 4th November 2019

*point of clarification on the VRU issue as confirmed above

Ministers, during the Act’s passage through Parliament, stated that VRUs will be excluded from the reforms entirely (i.e. from both the tariff and the SCT limit).

However, the Act only excludes VRUs from the tariff. The exclusion from the SCT limit can only be implemented through the Rules, which the MoJ previously stated would be published in January 2020. There is, therefore, nothing concrete to bind the MoJ to exclude VRUs from a SCT limit increase.

At recent industry events, MOJ indicated that the SCT limit increase would apply to all Road Traffic Accident claims except minors and protected parties. Given the silence on VRUs, the specific question was asked about whether or not VRUs would be exempt from the increase. The MOJ confirmed that the SCT limit increase would apply to VRUs because it would apply to all claimants except minors and protected parties.

Clarification is required from the MoJ on this point. We have emailed them for a response to this question; if we receive an answer before purdah begins on Wednesday (6 Nov) we shall ensure to provide an update.