Whiplash reform hangs in the balance as election fever reigns

In less than a month, voters across the UK will once again flood to nearby polling stations, where ‘X’ marks the spot for a potential change in political leadership. The last December election was held in 1923, but what will the 2019 results signify for the insurance sector – and specifically the whiplash reform?

Part one of the Civil Liability Act, known colloquially within the industry as ’the whiplash reform’, has been spearheaded by the insurance sector to create a simpler, frictionless personal injury claims process.

This includes a new Litigation in Person (LiP) portal, whereby claimants can process their own personal injury claims online, up to a revised £5,000 limit, without the aid of a solicitor; this is an increase on the previous £1,000 small claims limit.

The Act also allows a new tariff table, listing set damages for whiplash injuries that impact claimants for between three months and two years; this strives to clarify compensation levels.

The Act received Royal Assent in December 2018, and the LiP portal has been earmarked for release in April 2020. Although the industry questions whether this deadline is realistic or achievable, of greater concern now is the potential impact of the warring political parties as election day looms; the Motor Insurers’ Bureau (MIB) has already had to halt work on the portal until a new government is formed.

Access to justice

Although the election results are hardly a given at this stage, there is still a distinct air of nervousness from some about the future of the whiplash reform if the Labour party comes into power, led by Jeremy Corbyn.

For Donna Scully, director at Carpenters Group, the Civil Liability Act opposes Labour’s stance on providing access to justice.

“I look at the whiplash reforms and I see it as another attack on access to justice because motor customers are not going to be able to have representation; they’re going to have to bring the claims themselves post-reforms,” she said.

“I’ve got that feeling from the [Ministry of Justice] and the [Motor Insurers’ Bureau] that if Labour did get into power, then who would know where we’d stand? We’d have to wait and see.”

These views appear to be confirmed by Richard Burgon, the shadow lord chancellor and secretary of state for justice. In October 2018, prior to the Act receiving Royal Assent, he said: “The wider measures that the Conservatives plan to introduce alongside the Bill will leave tens of thousands of people unable to enforce their legal rights.

“The Bill may well turn out to be the thin end of the wedge for yet more restrictions on justice in all personal injury cases. If it passes, it will be celebrated as a great victory by the insurance companies in whose interests it has been conceived and drafted, and it will be ordinary people, whose rights are gradually chipped away, who pay the price.”

Needless to say, Labour voted against the Civil Liability Bill at every stage and has not referenced the Act in its 2019 manifesto, released last week.

Increasing opposition

Scully stated that the Justice Committee, which was formed to enforce rights to justice and establish the right for individuals to receive legal assistance without unaffordable costs, published “a very damning report on the whiplash reforms.”

She added: “They felt it was an attack on access to justice for premium paying motor customers. The tariff was set at an arbitrary low figure and the rise in the small claims limit was arbitrary as well in the sense that it wasn’t in line with inflation.”

Members of the House of Lords have also aligned with the Labour party’s position. Lord Beecham, shadow justice spokesman, for example, said in November 2018: “Of course, we continue to be opposed to the increase in the small claims limit by an amount higher than inflation.”

Industry backlash

But, where does this leave the whiplash reform if Labour do win the election? As the physical implementation of the Act hasn’t occurred yet, Labour could, very simply, postpone it or even forget about it completely.

Caroline Johnson, director of third-party technical claims at LV=GI, said: “There’s a very good chance that the reforms would be significantly delayed, if they happen at all. I don’t think [Labour] will be pushing to have them implemented.”

She added, however, that this “would be a great disappointment”.

Scully agreed: “Those people who have been involved in shaping the reform would be very upset. The insurance industry has invested a lot of money in the new portal, so would that all just be down the drain? I suspect it would be.”

Potential changes

Meanwhile, Scully further noted that even if Labour disapprove of the whiplash reform as it stands, there is no reason why the party couldn’t amend the Act once in power, to better adhere to its beliefs and values.

“If they stop it, all that money spent by insurers is gone, or would they use the portal in a different way and maybe reduce the small claims limit a bit lower? Or, would they raise the tariffs a bit higher?” she asked.

“They might say ’can we do some good around this, does this fall in line with our access to justice point? Can we do these reforms, but can we make them more reasonable?’

“If you said to me would they let them go through as they are, I would be very surprised – only because of the history and only because it’s a party that’s very much in to access for justice and legal aid and people having independent legal advice. Labour were very vocal in the [House of Lords] about opposition to big chunks of the reforms that they didn’t like.”

More time?

Although the industry concurs that not implementing the whiplash reform would be a regretful missed opportunity, some feel that a politically inspired delay could, however, be a good thing.

Shirley Woolham, chief executive at personal injury specialist law firm Minster Law, said: “There’s aspects of the Civil Liability Act that I really support and it would be a shame for customers not to get access to those kinds of benefits if the political winds change.

“That said, I fear there are a whole heap of things wrong with how the portal is being developed. If a shift in government and a shift in perspective creates time for us to make sure that the portal is developed properly and it’s not just foisted on customers, then I think that would be a good outcome.”