Reforms planned for August 2020 will not be implemented until April 2021.
An organisation representing insurers has warned that excessive delays to the introduction of whiplash claim reforms will “impact the benefits” to the public. The call comes after the government announced new rules planned for August will not be implemented until April 2021, because of the coronavirus pandemic.
Although the Association of British Insurers (ABI) said it could “understand” the reasons for the delay, it urged the government not to delay any longer than necessary. The organisation says delaying “beyond what is absolutely needed” would have an effect on claimants and consumers alike.
Under the Whiplash Reform Programme, the government will increase the small claims track limit for road traffic accident-related personal injury claims to £5,000, as well as introducing a fixed tariff of damages for pain, suffering and loss of amenity for whiplash injuries. The government will also ban companies and consumers making or accepting offers to settle a whiplash claim without a medical report.
The ABI had previously said reforms to whiplash injury claims would “mean a fairer system for claimants, motorists and compensators”. It also said 93 percent of the motor insurance market underwritten by ABI members had “committed to passing on cost benefits” of the reform to customers.
Now, though, the MoJ says now is not the time to change the sector, as the government focuses on easing “disruption and pressures” caused by the ongoing pandemic. The delay, the MoJ says, will allow the government to focus on “key services”, although it has committed to “make further announcements” if necessary.
“Given this unprecedented situation, we understand that a delay to implementing these much-needed reforms is necessary,” said the ABI’s director of general insurance, James Dalton. “However, any delay beyond what is absolutely needed will impact on the benefits to claimants and consumers. As an industry, we remain committed to continuing to support the Ministry of Justice so that the reforms can be introduced as soon as it is practical to do so.”
In its written statement, the MoJ said: “It is apparent that the current Covid-19 pandemic has had an unprecedented impact on the medical, legal and insurance sectors. While the whiplash reform measures remain important, the government is committed to acting to ease the disruption and pressures caused by the Covid-19 outbreak where it can.
“As a result, the government... agrees that now is not the time to press ahead with significant transformational change to the personal injury sector. We have therefore decided to delay the implementation of the whiplash reform programme to April 2021. This will enable key sectors of this country’s business to focus their energies on delivering their response to Covid-19, and will allow the government to focus on delivering key services in the justice area during this difficult time.”