The Civil Liability Act 2018 came into force in December 2018. It was introduced to try and cut down on the level of minor injuries that you could claim for prior to this Act with the help of a solicitor representing you.
It mainly focused on injuries caused in road traffic accidents and in particular to so-called “whiplash” injuries. These are caused when someone is thrown backwards and forwards due to an impact by another vehicle. As a result of the sharp “whiplash” effect of the movement, damage is caused, usually to soft tissues, muscles, ligaments or tendons, most often in the upper body, neck, back and shoulders.
This is not of course exclusive, but gives an idea of the type of injury the Act covers. Supporters of the Act say that it needed to be enacted to halt the rise of the “compensation culture”, a phrase beloved of insurers, but the existence of which is not supported by statistics according to the Association of Personal Injury Lawyers.
Before the Act came into being, as long as an injury was “worth” over £1000.00, your claim could be brought with the help of a solicitor, with your legal costs being paid by the Defendant responsible for your injuries in successful claims. The Act introduces significant changes to this. Now, your injury will have to be “worth” at least £5000.00 in road traffic claims and £2000.00 in other types of injury claims for costs to be paid. This means that many solicitors will not be able to afford to help those with lesser injuries to make a claim, as they will not get paid for their work by the Defendants even if successful.
Instead of each claim being considered on an individual basis as before to work out what would be appropriate compensation, the Act introduces a “tariff system”. This means that there are specific brackets into which injuries will be placed, with the same sum for compensation for all in that bracket. This sum may not compensate fully.
Not only that, but the Act introduces a new electronic system called the “portal”. People will be expected to make their own claims. Full details of the portal are not yet available. The details are still being worked out, even though the portal was planned to go live in early 2020. We are assured that the portal will be “user-friendly” for non- legally trained members of the public. But we have to reserve judgment on that until we see how it is proposed to work.
So many people with genuine and sometimes significant smaller injuries may not only now have to deal with their own claims, but may well remain under-compensated.
In an article in “Legal Futures” for 27 November 2019, Nick Hilborne suggests that a report by IRN Research shows that in fact, only an estimated 4 in 10 potential claimants, about 43%, are likely to use the portal and that 3 in 10 (31%) people will be put off making a claim if they can’t use a lawyer. Only 25% of adults said they would be willing to represent themselves in Court should it come to that.
Good news for insurers; not such good news for injured people who may now not be able to make a claim.
To be fair, the report suggested that only 18% of people said that they would be happy to take their own claim through all the stages of the existing small claims process, which does not involve use of a portal. This is understandable, but use of the portal may present its own problems for those not IT literate or with limited access to IT.
The report also suggested that there was “considerable scepticism” among claimants that insurers would pay the “correct amount” of compensation if lawyers were unable to negotiate settlements. Only 15% thought insurers would do this.
Somewhat surprisingly, the great majority of claimants expected insurers to fulfil their promise of cutting motor insurance premiums in the wake of these reforms. Only 21% said they did not believe this. Time will tell once the reforms begin to impact.