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Thursday, 17 November 2016

Whiplash & Small Claims - this time it's for real....

In November 2015 the former Chancellor, George Osborne announced plans the abolish the right to damages for whiplash injuries and to raise the Small Claims limit in Personal Injury Claims. The effect of the latter is to remove the right of victims of accidents to recover legal costs from insurers. 

This would leave most victims without legal representation against insurers who have massive resources available to them – David v Goliath without the slingshot!

A few weeks ago it seemed that these draconian proposals were off the agenda for now –

I predicted then that the insurance industry would not leave things there. Why would it? Insurers have been given all that they’ve asked for from a very compliant Conservative Government and their friends in the media.

It is no great surprise therefore to see the plans revived with a vengeance. It was announced yesterday that the MOJ is consulting on the increase in the small claims limit and planning to cap the levels of damages for whiplash. According to ITV news the Lord Chancellor Liz Truss talked of a ‘rampant compensation culture’. There is also familiar rhetoric about clamping down on fraud and saving billions in insurance premiums.

The so called compensation culture is a mythical being created to feed these attacks. The evidence is that there has been a steady reduction in the number of claims and hardly any evidence of fraud –

The consultation period is just a few weeks and is calculated to close immediately after the Christmas break.  This reduces the chances of an effective response and suggests that Ms Truss is intent in giving this gift to insurance companies regardless of any opposition.  The chances of all of this leading to any significant reduction in the cost of motor insurance are equally mythical –

These plans will have drastic consequences –

Victims will either act for themselves or be deterred from claiming at all

All injury claims will be affected, not just whiplash

Law Firms across the country will close leading to hundreds of job losses

Insurers’ profits will rise

This is a very disturbing day for us all.

Post Script

I have just read the Consultation Paper over lunch. It is worth a read. The proposals are not quite as draconian as the press reports and there are options for discussion. But I suspect the MOJ spin reflects their intentions.

What is notable is that at Page 78 of 78 pages of narrative  is the following -

'We would also welcome views from respondents on the assumption in the IA that 85% of insurers savings will be passed onto consumers' Just in case you happen to blink and miss it!


  1. So, what do we do? Is there a petition to sign? A march to protest? A place to send letters and a pro forma for letters to send? If Big Business can move the government, can't we move the people to help us now? Before they lose out later?

  2. We are drafting a resonse which I'll circulate...