ILC ARTICLE

Government abandons further whiplash reforms

24th March 2022

The Ministry of Justice (MoJ) has announced that part two of the proposed reforms to the soft tissue claims process have been shelved.

Part one of the Reforming the Soft Tissue Injury Claims Process – implemented in May 2021 – related to the small claims limit for PI claims and a fixed compensation tariff for RTA cases. Part two was expected to be much broader, encompassing referrals, credit hire and rehabilitation.

However, the government has announced that no further action will be taken and instead it will allow the market to resolve remaining issues surrounding fraud and claims costs.

In Part 2 of the Government Response to: Reforming the Soft Tissue Injury (‘whiplash’) Claims Process, the MoJ concluded: “The submissions, evidence and data summarised in this this document were provided in 2016/17. Due to the considerable amount of time which has passed since they were received and reform subsequently implemented, the Government does not propose to take forward specific action based on the views supplied at this time.”

Peter Gomes, interim CEO of the CHO said: “This is very welcome news for our members. Members are facing significant challenges as a result of the pandemic, Brexit and associated supply chain issues, and further market intervention from the government at this time would have been a serious concern, especially as the whole claims industry continues to grapple with the most recent set of reforms (on whiplash) and have further changes to absorb with regard to reform to the fixed recoverable costs regime.”

Matthew Maxwell Scott, Executive Director of the Association of Consumer Support Organisations, said, “A sector so used to often damaging upheaval will be giving a sigh of relief that the government has decided against any further changes. Rightly, ministers are now looking to the wider industry to keep its own respective houses in order, and we look forward to further work with colleagues on issues such as rehabilitation, alternative dispute resolution and credit hire.”