Market Round-up

Market round-up: September 2020

3 minutes

Neil Rose, Editor of Legal Futures, October 01, 2020

With the summer all but over and children back at school (for now), April 2021 – and the latest attempt to implement the whiplash reforms – suddenly doesn’t seem so far away. But the ‘to do’ list is just as long as it was when Lord Chancellor Robert Buckland announced the year-long delay in April.

Still we have no rules. How many times have I had to write that in the past year? Still the Ministry of Justice (MoJ) needs to address the implications of going back on its plan to provide ADR in the new litigant in person (LiP) portal.

Of course, everyone has had other things on their plates in recent months, but we are a little over seven months to implementation. The clock will soon be ticking loudly. There are plenty of observers who think they will be delayed again, although politically it would not look great – given that implementation was originally due in April 2019 – and the insurance industry would be furious.

So is there going to be more help for LiPs in lieu of ADR? In August, the MoJ “announced” that it was giving a £3.1m grant to enhance support for LiPs, in an initiative it is delivering together with the Access to Justice Foundation. However, this just restated a decision first made in February 2019 as part of the legal support action plan released after the MoJ’s review of LASPO. The plan does not mention personal injury at all and the money appears earmarked for areas where legal aid has been limited or withdrawn rather more recently than PI.

Back in June, in a written parliamentary question from Labour MP Andy Slaughter, the MoJ was asked how it would ensure the decision on ADR would not create an incentive for insurers to deny a claim’s liability.

Minister Alex Chalk replied that, once work on the whiplash reform programme resumed, “the government will continue its work with the Civil Procedure Rule Committee on new and revised rules, pre-action protocol and practice direction to underpin the reforms and the system.

“This will include consideration of incentives and controls for all users of the online claims service where it is appropriate to do so. Currently, motor insurers accept liability for damages in the majority of whiplash claims and we do not expect insurer behaviour to change after implementation. However, claimants will have the option to go to court to establish liability where this is necessary.”

Not terribly helpful. It would appear the MoJ’s strategy is, first, to cross fingers and hope it doesn’t happen, second to flatter the insurance industry by finding the idea it would operate in such a way ludicrous, and third to say that ultimately ministers/the Financial Conduct Authority will act if it does happen. That’s not really good enough. The low-value PI system has been built with carrots and sticks at every turn – except this one.

Another challenge about which we’ve heard nothing is how the MoJ is going to publicise the new system. Somewhat amusingly, the Association of British Insurers (ABI) recently suggested that an increase in motor insurance fraud may be related to the reforms. There was a 6% increase in detected cases of motor fraud last year, around 75% of which contained a personal injury element. The association said: “This may reflect some fraudulent activity ahead of the introduction of personal injury reforms in April next year.” If so, these are some unusually well-informed crooks – realistically hardly any member of the public knows this is coming.

Meanwhile, the MoJ continues to stall on when it will progress the next wave of PI reforms, the now almost infamous part 2 of the whiplash reforms consultation which closed in January 2017. Speaking in January, David Parkin, deputy director of civil justice and law policy at the MoJ, said he regretted having predicted a year earlier that the government response to these would be published by the end of 2019, and refused to give a new date.

Alex Chalk was also asked about this in Parliament. Stressing that next year’s reforms were the priority, he said: “We are aware of the continued interest in the issues raised in part 2… and will be considering our response to that consultation after the April 2021 implementation.”

That sounds like code for ‘Don’t hold your breath – it’s deep in the long grass somewhere’.

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