About the proposed legal reforms

The UK government has bowed to pressure from the insurance sector to propose new reforms that will - from April 2019 - slash the levels of compensation and access to justice available to the innocent victims of road traffic accidents. These reforms have come about because the government feel that too many people are claiming for injuries.

The proposed changes could see the amount of compensation paid to innocent victims slashed by up to £1,850 reducing payouts to as little as £235 for months of pain and suffering. What's more the proposals will cut off access to legal support when trying to make a claim.

It is important to note that these reforms haven't become law yet, so if you are looking for support and advice about making a claim for a road traffic accident please contact us.

What will the changes mean?

Let's look at an example:

Under the current law, Jane instructs a lawyer to take on her case. They act on a 'No Win No Fee' basis.

There are two elements to her claim:

1. General damages: these compensate her for the pain and suffering, and what is called loss of amenity - the everyday things she can't do because of her injury, like housework and gardening.
2. Special damages: These are things like the cost of repairing her car, lost wages from having to take time off work and having medical treatment, like physiotherapy.

In the Civil Liability Bill, currently going through Parliament, the government wants to slash the general damages that injured people are entitled to, even if they suffer pain for up to two years.

At the moment, judges think Jane should receive £1,750 in compensation for three months of pain and suffering. But the government, with no evidence and under a good deal of pressure from insurance companies, are proposing she should now get just £235. By contrast, they are not proposing any limits to car repair costs. Isn't that putting cars before people?

But that's not all. Through a change to court rules, the government also wants any case where compensation is not more than £5,000 – which is almost all road traffic cases and includes injuries like broken bones – to go through the Small Claims Court.

This matters because, at the moment, if you use a solicitor and win, the other driver's insurer pays your solicitor's fees. That doesn't happen in the Small Claims Court. If you win, you'll have to pay your solicitor from your compensation. Doesn't sound very fair, does it?

This makes the economics of using a solicitor (from both your and the solicitor's point of view) much trickier and the reality is that many solicitors will no longer be able to take on this kind of work.

You would still be able to bring the case yourself without a solicitor, of course, but you'd have to do all the work of a solicitor yourself, involving tricky legal concepts like liability, causation and quantum. And there's nothing to stop the insurer on the other side from using a solicitor to fight you.

Between lower general damages and not having to pay lawyers' fees, the government estimates that insurers will save more than £1 billion. It admits that at least £200 million of this will go straight into higher salaries for staff and higher dividends for shareholders, but says it expects insurers to pass on the rest of the savings through lower car insurance premiums.

Why are First4Lawyers objecting to the reforms?

Our main reasons for opposing the proposed reforms are:

• The proposed tariffs are unfair and out of kilter with judicial guidelines
  The current format of assessing the value of compensation for any personal injury claim is based on the Judicial College Guidelines. This has been used for over 25 years and takes into consideration the individual severity of each person's injury. The proposed new tariffs have been created by government with little or no professional consultation and have no reflection on these guidelines.

• The Small Claims Courts are the wrong place for personal injury claims
  Raising the small claims limit to £5,000 will deter genuine claimants from pursuing a case because they will see the process as daunting. However, it will do nothing to discourage fraudsters from 'having a go'. It will clog up the court systems with hundreds of thousands of extra cases per year as there is no suitable online alternative. In addition the small claims track has been £1,000 since 1999. If it was increased by the same rate as the consumer price index it should rise to £1,500. If it was to increase at the same rate as the retail price index it would be £1,600. There is no justification as to why it should be £5,000. 

• It will lead to undervalued claims and damage the wider UK economy
  Without the support and guidance of a solicitor many claimants won't be able to easily identify what is a fair and valid level of compensation reflective of how long their injuries may last. Some will presume they will get better in a few weeks or months but individual assessment from medical experts supported by a solicitor could highlight longer term injuries.

• Fraud and false claims are a myth that will deny genuine accident victims their right to justice and compensation
  The insurance sector keeps trying to muddy the waters with speculative figures relating to fraud but proven fraud is less than 1% of all cases. Fraud should rightfully be tackled but it shouldn't be used as a scare tactic to prevent genuine victims from making a claim.

• It devalues insurance and the principles of what it is for
  Insurance is designed to help repair the vehicle and the human being. Simply by denying consumers access to justice the insurance sector is doing nothing but feathering its own nest. Consumers will be buying a service that provides few demonstrable benefits.

• The insurance industry have a poor track record of passing on savings to consumers
  Falls in claim numbers and a reduction in the average amount paid out to claimants have resulted in a boom in profits for insurers and their shareholders. At the same time the cost of insurance for motorists has continued to increase.

How you can support the campaign