These reforms are being introduced to reduce the number of fraudulent and unnecessary claims that insurers say are costing the motor industry says £2 billion each year. However, there is a lack of evidence to back-up this figure and some have suggested that it has been hugely distorted. In 2014, less than 1% of motor accident claims were proven to be dishonest.
The government has justified the reforms by suggesting that the ban on whiplash claims will reduce the cost of insurance premiums by £40-50 a year. However, there is no history of insurers passing savings resulting from legal reforms onto their customers. By preventing victims of accidents from claiming, it is ultimately the insurance companies who will profit from the new measures.
Because the vast majority of road traffic accident claims (many of which involve whiplash injuries) are valued at less than £5,000, thousands of people with genuine, low-value claims will find themselves at a disadvantage. They may not understand how much their claim is worth or know how to go about securing the compensation they deserve. If they choose to instruct a solicitor, they will have to pay their legal fees themselves, which could mean taking a chunk out of their compensation.
British government has suggested that these lower value claims are straightforward enough for individuals to deal with on their own, without legal aid. However, all personal injury claims can be complex and, without the help of an experienced lawyer, claiming compensation is incredibly difficult and time-consuming.
These changes will make the process of securing compensation harder and are likely to put people off claiming at all. Innocent victims will be unable to access the justice they deserve leading to them missing out on thousands of pounds in compensation.