Ahead of the implementation of the delayed Whiplash Reforms, now set to be introduced in April 2020, there might well be a surge in reported motor claims, according to Chairman of the Society of Claims Professionals, Sue McCall.
The UK Government announced previously that the Soft Tissue Injury Claims reforms – commonly known as whiplash reforms – had been delayed from April 2019 to April 2020 after reservations were raised by the Justice Committee.
In light of the reforms, which looks to reduce the volume of fraudulent whiplash claims and lower the cost of soft-tissue claims in general, underwriters and claim professionals are bracing for the changes that are set to come into effect in April next year.
The Ministry of Justice states that the reforms will “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.”
However, McCall, who also serves as Head of Claims at Aspen Risk Management, has said that in light of the expected changes the market could see an uplift in reported claims.
“We may see a surge in reported motor claims ahead of the reforms, as we did prior to the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012,” she explained.
Under the reforms, the financial compensation for injury will be reduced by setting a fixed amount payable for injuries lasting less than two years and reduce the amount an insurer must pay in costs by increasing the small claims track limit from £1,000 to £5,000 for road traffic accident related claims.
For employer’s liability and public liability the limit is raised to £2,000. Commenting on this, McCall said: “The headline result of this increase is that those claims valued below the new limits will no longer result in costs recovery.
“The expectation is that there will be a far greater number of litigants in person. This will bring with it the need for more time spent per case in explanation and communication.”
Interim Chair of the Society of Underwriting Professionals, David Williams, called on underwriters to make sure that they are on top of changes and has urged companies to work to report the savings these reforms deliver to consumers.
“With motor (insurance) pricing being a complex area, separating out the impact of just the legal changes might prove much more difficult than I think the government is expecting,” said Williams.
