A sticking plaster approach: Civil Liability Act reforms trivialise the injured

For as far back as I can remember, insurers have been successfully hoodwinking the government into believing that society is blighted by epidemic levels of personal injury claims. Yet the statistics show otherwise. Ministry of Justice (MoJ) statistics for the last quarter of 2018 and the first quarter of 2019 show that the number of personal injury claims in the County Court has fallen below 30,000 in each quarter – a figure last seen in 2011.

Earlier this year, the Association of British Insurers (ABI) put on record what many of us working to help claimants have known for a long time; that there has been “a slowly decreasing” volume of personal injury claims since 2016. Finally, the number of motor claims registered with the government’s Compensation Recovery Unit increased marginally over the last year to 660,608; but still the second lowest number since 2008 to 2009 – and down from the peak of 828,489 in 2011 to 2012. So, what was the point of the Civil Liability Act 2018 (CLA), you may well ask? To my mind, all it’s done is demonstrate the insurance lobby’s hold over Westminster. The CLA has trivialised what can be a serious injury with long-lasting consequences; and places a much higher importance on getting cars repaired and back on the roads than it does on getting people back to their pre-injury state. It beggars belief that the government has not been willing to tackle what is essentially organised fraud, but has instead set its sights on the injured and vulnerable: the easier option.

The government should be hanging its head in collective shame at, once again, allowing itself to be duped by the powerful insurance lobby. I hope ministers take note of these figures and hold insurers to their promise to pass on savings of £35 per year, per motorist. The CLA requires the Financial Conduct Authority to collect evidence on this, but we won’t see anything until 2024 at the earliest; and there is no specified sanction if insurers are found not to have done enough. In any case, the ABI public relations machine has already started sowing the seeds for its next campaign. Its annual report said: “With profitability a challenge, insurers are continuing to contend with high claim costs, driven up primarily by vehicle repairs.”

Last time I checked, insurer profitability was going in one direction – and it wasn’t down. In the meantime, the government has contracted out to the Motor Insurers’ Bureau the task of building the new online portal for litigants in person who will be bringing their own muchreduced whiplash claims from next April – another legacy of the CLA. There is growing concern about this too. The Motor Accident Solicitors Society has criticised the MoJ for cutting corners “in order to meet the politically driven deadline of April 2020” – and suggested it still could not be met. And against this background is the impact on law firms.

A survey we recently carried out found claimant solicitors predicting that the reforms will lead to a sharp contraction in the market, with widespread firm closures and staff redundancies. Indeed, the changing PI market is already having a negative impact, with 42 per cent saying their firm had seen profit decrease over the past year, while 46 per cent said cash flow had worsened and 40 per cent had seen staff numbers reduce. After the reforms come into force in April 2020, 61 per cent foresaw a huge cull of law firms, leaving a small number of big practices, while many expect a new breed of claims management company to become the dominant handler of low-value work. But half of solicitors thought injured people would either not bother claiming for smaller sums or insurers would pressure them into under-settling. The reality is that consumers will not be receiving a windfall any time soon. For those unfortunate enough to be injured in an accident that wasn’t their fault, they’ll be facing an uphill struggle for justice. S