Government whiplash bill unveiled

The government has confirmed it will raise the the small claims limit for whiplash injury to £5,000, but will impose a lower threshold of £2,000 for other personal injury claims.

There will also be a ban on any offers to settle personal injury claims without medical evidence.

The new fixed tariffs are contained in the Prisons and Courts Bill published today.

Announcing the new legislation, Justice Secretary Elizabeth Truss said the measures will cut car insurance premiums by about £40 a year, “helping to crack down on the compensation culture epidemic”.

The bill follows a period of consultation which ended on 6 January. The small claims limits mean that successful claimants up to those thresholds will not be able to recoup legal expenses, effectively excluding lawyers from low value claims. 

The measures are a retreat from the government’s original plan to increase the limit to £5,000 across the board.

The bill also contains proposals for fixed tariffs for whiplash claims.

ABI director of general insurance policy James Dalton welcomed the bill.

“The reforms to whiplash claims set out in the bill cannot come soon enough,” he said.

”For far too long claimant lawyers have been defending a system riddled with exaggerated and fraudulent claims because they have been profiting handsomely from it. The gravy train must stop.

”Motorists know that the UK’s roads have been getting ever safer, so why have whiplash style claims been rising? People want an  insurance claims system that provides compensation and support to those who genuinely need it. What they don’t want is to be plagued by spam calls and texts from ambulance chasers, whilst personal injury lawyers continue to profit from a broken system in urgent need of reform.”

Lobby group Access to Justice (A2J) criticised the bill.

“The government seems hell bent on removing the rights of ordinary people to gain redress for injuries that weren’t their fault,” said spokesman Andrew Twambley.

”Increasing the small claims limit to £5,000 discriminates against ordinary people suffering whiplash injuries and will open the doors for claims management companies and cold callers to wreak further havoc on the market.”

Qamar Anwar, managing director of First4Lawyers said: “In rushing through its response to the PI reforms, it is clear that the government and insurance sector value the damage caused to vehicles more than they do to humans.

“It is clear that the consultation – which only closed on 6 January - simply paid lip service to a decision that was already made by the government in cahoots with the insurers behind closed doors. We are shocked at the government’s lack of concern for innocent victims of road traffic accidents.”