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News | Wed 25th Nov, 2015
The government has released a summary of the Autumn Statement with 20 Key Announcements, the last of which will be of great interest to personal injury lawyers. It reads as follows:
“20. People will no longer be able to get cash compensation for minor whiplash claims
To make it harder for people to claim compensation for exaggerated or fraudulent whiplash claims, the government is ending the right to cash compensation.
More injuries will also be able to go to the small claims court as the upper limit for these claims will be increased from £1,000 to £5,000.
This means that annual insurance costs for drivers could fall by between £40 to £50 a year.”
George Osbourne anticipates these changes “will remove over £1bn from the cost of providing motor insurance” and expects insurers to pass on that saving to consumers.
There had already been speculation over the last week that the government was going to introduce its previously shelved plan to increase the small claims limit for personal injury claims when the insurance fraud taskforce reported next month.
What is surprising though is the reference to “ending the right to cash compensation”. It is as yet unclear what it meant by this. Footnote 55 to the Autumn Statement gives some clarification by explaining that “Claimants will still be entitled to claim for ‘special damages’ (including treatment for any injury if required and any loss of earnings) but entitlements for general damages will be removed.”
It will be interesting to see though how it will be decided that a case falls into the category in which there is no entitlement to general damages. Elsewhere in the Autumn Statement is a statement that the government will reduce the excessive costs to insurers of whiplash claims by “removing the right to general damages for minor soft tissue injuries”. This would seem to cover more than just whiplash injuries. There may also be interesting arguments where multiple injuries are involved. These problems are unlikely to be straightforward and may result in substantial argument, inevitably using court time.
It seems likely we will have to wait for the report of the insurance fraud taskforce, due before the end of the year, for further details. Keen readers who can’t wait until then might be interested in the research briefing published in advance of last Wednesday’s debate in Parliament. Otherwise, watch this space!
