Report into Personal Injury Reforms Impact Assessment13-Jan-2017
The consultation into the government’s proposed changes to the PI industry closed recently.
The debate around the personal injury reforms continues to gather pace, with the issue being debated by government this week after being raised by Labour MP Rob Marris, who is a former partner at Claimant law firm Thompsons.
Personal Injury Reforms
Justice minister Sir Oliver Heald appeared to suggest that there will be no U-turn made by the government over the proposals, and that he was sure that the insurance companies will pass on the £40 per year savings onto motorists.
The justice minister stated that the number of claims had increased from 460,000 to 770,000 over the last ten years, with 90% of claims relating to whiplash.
Meanwhile, a report commissioned by Claimant groups opposed to the PI reforms has stated that the reforms would benefit insurers at the expense of taxpayers and motorists.
An independent economics consultancy was appointed by the Law Society, Association of Personal Injury Lawyers and Motor Accident Solicitors Society to review the government’s impact assessment (IA) and consultation on the small claims limit.
Small Claims Limit Consultation
The report suggests that the impact assessment makes an assumption that civil justice solicitors produce “no benefits to society”. The suggestion is that the impact assessment is flawed as it takes into account the potential increase in insurer’s profits, but not the reduction in legal fees that law firms will experience.
It states that, “The IA makes the implicit assumption that solicitors, and the civil justice system as a whole, produce no benefits to society so that any reduction in solicitors’ revenues is a benefit to society.”
With the government set to release its response to the consultation at the end of January, there will likely be some further clarity around the implementation of the proposals. In the meantime there will no doubt be continuing debates from both Claimant and Defendant sectors.