David Johnson on dealing with litigants in person, whiplash fraud and a potentially shrinking claimant legal services market
In the 12 years since 2005, the number of personal injury claims in England and Wales has risen by more than 67%, from 460,000 to 770,000 according to Government statistics.
That increase followed on the watershed moment in PI claims in April 1999, when claims funding moved from Legal Aid to Conditional Fee Agreements. This made claims dramatically more profitable for claims service providers and sparked exponential growth in the claims industry.
But that growth has come at a dramatic estimated cost of £1 billion to society as a whole. The problem of how to tackle that cost, and the issue of Britain becoming the whiplash capital of the world – as some MPs have described it – has become an increasingly thorny question for Government in recent years.
In November 2016, the Government launched a public consultation specifically to address how to “disincentivise” minor, exaggerated and fraudulent claims. The wording of the consultation strongly suggested that the Government had come to regard the dramatic rise in whiplash claims as the result of a claims culture and an industry fuelled by aggressive marketing, rather than as a symptom of increasing numbers of injuries or improved awareness about rights to compensation.
Three months on from that consultation, in February 2017, the Government unveiled a new package of proposals in the form of the Prisons & Courts Bill.
There were two key strands to the measures outlined in the Bill. Having opted not to remove the entitlement to damages altogether, the Government proposed steps to reduce the value of compensation for RTA-related soft tissue injuries lasting less than two years, through the introduction of a tariff system to cap damages. It also proposed rule changes to ensure that compensation is only paid out where a medical report has been provided as proof of injury. That combination of measures was seen by many as an attempt to reduce the financial incentive to bring such claims and to ensure that they are properly scrutinised.
The proposed tariffs signalled a significant decrease in the levels compensation for affected claims, particularly at the lower end.
The second strand of the proposed measures was directly focused on costs and representation.
The Government proposals aimed to move significant numbers of claims into the small claims track (SCT), where the legal costs of claims are not recoverable by adjusting the financial threshold for the classification of such claims. The proposal was that the SCT limit would be moved from £1,000 to £5,000 for RTA personal injury claims, and to £2,000 for other types of personal injury claim.
A secondary outcome would be an inevitable reduction in the number of claims where claimants would be represented by claims service providers. The substantial industry that has grown up around claims would be denied the ability to continue to profit from whiplash claims unless they could persuade a reduced pool of claimants to cut them a slice of their already reduced damages.
The Government estimated that its proposed reforms will cut car insurance premiums by an average of £40 for motorists in England and Wales, leading consumer groups and motoring associations to welcome the Bill.
However, others were far less welcoming of the proposals, ostensibly out of concern that injured individuals would be left without compensation or legal representation to assist in recovering that compensation. In other cases, no doubt, objections arose from a fear that a radically altered personal injury claims market would no longer fit with a particular business model.
The snap General Election effectively killed the Prison & Courts Bi