We have all heard about the alleged claims culture and the government's determination to scrap damages for 'whiplash'. Forgetting for a moment that this will not address the concern of fraud, nor guarantee reducing motor insurance premiums, this change has another very serious repercussion.
A survey published today shows that the changes would have very serious impacts on the legal workforce and will result in significant and widespread redundancies. This will drive up unemployment, reduce tax revenues (insurance premium tax, corporation tax, income tax, national insurance) and as a result drive up claims to the welfare system. Is this worth a £40 a year off your car insurance?
Compensation is not a culture, it is to help those injured by others deal with the consequences. Yes it is abused by criminals, but so are alcohol, cigarettes and many other things but we don't ban them to reduce crime. The current proposals might reduce fraud but they will increase injustice, hardship, poverty and put further pressure on an already overburdened welfare system.
More than half of claimant personal injury practices will be forced to shut down or look for alternative work if the government’s proposed whiplash reforms go ahead unopposed, a new survey has revealed.A survey of 71 firms was conducted by First4Lawyers in the wake of last month’s announcement that the Ministry of Justice is considering an increase in the small claims limit to £5,000 and a removal of general damages for ‘minor’ soft-tissue injury claims.Some 41 per cent of respondents indicated they would be forced to shut down the whole firm or the PI department if the small claims limit went up as proposed. A further 24 per cent said they could adapt and survive but only if the increase was limited to road traffic claims, instead of the government’s preference to apply it to all PI claims.