Putting an End to the 'Compensation Culture'

Many of us would agree that a claim for facial scarring or a fractured rib cannot be considered the same as a claim for a faulty washing machine, as put forward by Law Society president Robert Bourns. Yet, under the Government’s proposed reforms to particular personal injury claims, such an analogy could become a reality.

The measures were first announced by the Chancellor in his autumn statement in November 2015 and, on the 17th November 2016, the Government publicised its plans to reform personal injury claims relating to ‘minor, exaggerated and fraudulent soft tissue injury’ (whiplash) claims, raising the small claims limit and the scope of matters considered under the small claims process.

The proposals are out to public consultation which will close on the 6th January 2017 and, in summary, the Government’s aim is to crack-down on the number of successful whiplash claims to put an end to a ‘compensation culture’. The amount of claims relating to whiplash is 50% higher than a decade ago and the Government purports that the compensation awarded for the average minor whiplash claim is out of proportion compared to the cost it takes to deal with them. To resolve this, the Government consultation paper proposes:

• Compensation for minor whiplash claims (for pain, suffering and loss of amenity) will be removed entirely or replaced by a fixed sum;

• To include a tariff of payments in more significant claims, raising the small claims limit in personal injury claims from £1,000 to £5,000;

• Whiplash claims will need a medical report from an accredited medical expert.

In its paper, the Government distils blame in advertising and media coverage which has encouraged many motorists to make exaggerated claims, aiding the ‘compensation culture’ within which it has become the norm to seek damages for often minor and falsified claims with a financial incentive.

The Government states that “the reforms will make sure that those genuine claimants who suffer more enduring injuries receive compensation which is proportionate to the level of injury sustained” and that claimants could still be able to recover compensation for other forms of loss, such as medical costs and loss of earnings resulting from the injury suffered.

A number of the measures put forward will require primary legislation and the Government intends to legislate as soon as parliamentary time allows. There will also be changes to the Civil Procedure Rules and amendments to relevant Pre-Action Protocols.

Despite the Government’s attempt to alleviate any concerns of injustice by the reforms proposed, the Law Society is campaigning to oppose reforms of this kind which are said to be undermining access to justice for those who truly suffer by whiplash, at no fault of their own, and have a right to full and proper compensation. The crux of their argument is that the small claims track was designed to handle low value disputes on matters such as faulty goods and, in many cases, the court will not order advocate costs to a successful claimant. This would mean that many claimants would attempt to bring a claim to a court and act as litigants in person without legal advice.

The Law Society, in its opposing campaign, asks whether it is appropriate to instil the same process for claimants with a fractured rib as it is for those with faulty appliances and, if so, whether justice can truly operate in this manner. It has stated that “these proposals would completely undermine the right of ordinary people to receive full and proper compensation from those that have injured them - quite seriously - through negligence”. Jonathan Wheeler, president of the Association of Personal Injury Lawyers (APIL) has also indicated his concerns with the reforms, stating that “it is unconscionable to remove compensation from certain types of claim… To do both that, and then make it really difficult for others to proceed without even analysing the impact of previous reforms, is completely irresponsible.”

To that argument, Justice Secretary Liz Truss said “for too long some have exploited a rampant compensation culture and seen whiplash claims an easy payday, driving up costs for millions of law-abiding motorists”[9], which, in itself, is undermining justice for those who truly need it.

Although it may be concluded that it would be rare for a society of solicitors to promote in favour of reforms which may see their client list dissolve as more claimants face small claims track cases on their own, the reforms to the small claims limit can be said to somewhat undermine access to legal advice which is not only a right enjoyed by ordinary people, but a fundamental aspect of the rule of law within our constitution.