A new insurance claims system designed to slash the size of payouts for whiplash injuries could be delayed.
The system was approved by the UK parliament in 2018 and is designed to help cut insurance premiums by reducing the amount of compensation that can be paid to people claiming for whiplash.
The centrepiece of the reforms is an online portal, designed to allow injured people to make their own claims quickly and easily. It is due to start working in April.
But Gordon Dalyell, president of the Association of Personal Injury Lawyers, believes its introduction should be delayed to ensure that victims have access to advice. “If the reforms are going ahead, it has to be in a proper and considered manner,” he said. “There ought to be some delay to make sure that it can be done properly.”
Insurers have backed the reforms, which are part of the Civil Liability Act, arguing that they will cut fraud and the cheaper claims costs will result in lower premiums for customers. The industry has been struggling as it faces higher payouts to cover serious injuries after a government ruling changed the way payments to victims were calculated.
But APIL has campaigned against the changes and called for the rollout of the portal to be delayed. “The reforms raise real issues in terms of access to justice. To expect lay people to become used to using complex software is a challenge . . . people need advice,” said Mr Dalyell.
The portal is being developed by the insurance industry on behalf of the government, and has cost tens of millions of pounds. Any change to its timing would have to be made by the Ministry of Justice, which says that April remains the target date.
James Dalton, director of general insurance at the Association of British Insurers, said that delaying the introduction of the portal would be bad news for people who buy car insurance. “The longer it takes to come in, the longer it will be before customers reap the benefits of reform.”
He added that the portal was ready to use. “Insurers have done what they said they’d do, and from an IT-build perspective it’s ready,” he said. “I don’t see any public-policy justification for a delay.”
The portal is just one part of the Civil Liability Act that still has to be finalised. Another is a new system of tariffs for whiplash injuries that will dictate how much injured people can claim.
The tariffs have yet to be published but they are expected to be much lower than claimants can receive under the current system. The amount payable for an injury lasting 9-12 months, for example, could fall from £4,000 to £1,250.
Mr Dalyell fears that the new tariffs will be too low. “The tariff would reduce the value of a whiplash injury to just a few hundred pounds. It is really taking something that lasts three to six months and equating that to a few hours delay on a train journey,” he said.