Preparing for the Personal Injury Reforms

Over the last 20 years there have been many changes to the legislation which governs personal injury claims. Considering the revolution of the Woolf reforms, the advent of ‘no-win no-fee’ from the Access to Justice Act 1999, through the introduction of the MOJ portal in 2010 to LASPO in 2013 and Medco in 2015, our industry is well practised at adapting to a changing regulatory landscape. However the whiplash reforms the present government intends to introduce in this parliament have a different impact and consequence for the insurance industry than we have previously experienced.

Since Access to Justice the majority of changes which have followed, including LASPO and Medco were related to the conduct of claims and governed how the parties involved in personal injury claims work together, and whilst disruptive to the industry, they had limited negative impact on the customer.

The proposed whiplash reforms are different in that regard; the reforms will directly and adversely affect access to justice, the cost of legal services and the value of compensation which may be awarded.

Understandably brokers are apprehensive because of the uncertainty surrounding the proposed changes. They understand the implications for treating customers fairly and the potential for customers to feel they have been ‘left high and dry’ if the legal assistance they expected is not available post reforms. Because of the continuing lack of detail or timeline it’s hard for a broker to plan how they respond and how they can continue to support their customers.

The role of the legal expenses specialists is to provide brokers with products that are future proofed. Our own preparations for the PI reforms is in product development, creating a range of Motor Legal Expenses solutions that are “whiplash ready”, to support brokers making the transition. A comprehensive Motor Legal Expenses policy will ensure customers have legal support should they need it so this is going to be the primary solution for many. There also needs to be marketing and PR support to help brokers articulate the benefits to customers who are generally unaware of what this will mean to them.

One of the key concerns we’re hoping to address is that of timing. Because of the annual purchase cycle of insurance all of these steps need to be put in place well in advance of the changes. It’s unlikely there’ll be an 18 month window from the government so getting the right MLEI product in place now will ensure brokers are ready pre, post and during the transition.