The article was first published in Modern Insurance Magazine in Issue 33.
There was no real surprise when the Government announced that the whiplash reforms would be delayed until April 2020. In the published response to the Justice Select Committees findings, the MOJ stated that “it is important to get the introduction of these important reforms right rather than strive for an early deadline”. Their response goes on to say that the Government is proposing to commence large scale testing for an online litigant in person portal in October 2019. This is a good thing; such a wholesale change to the customers legal rights needs extremely careful consideration.
Today, the not at fault injured party in a road traffic accident can expect expert legal representation, capped fees and no payment in advance (or possibly no payment at all if they have motor legal expenses insurance). This regime which was brought in by the Access to Justice Act almost 20 years ago has become the norm in England & Wales and whilst some state it’s expensive and open to abuse, there is no doubt that it provides excellent service to customers in a well regulated environment.
Motorists attention has been caught by headlines promising an end to the ‘compensation culture’ and a reduction in motor premiums. In contrast, the impact of the proposed changes has not been well publicised and institutions supporting the reforms are becoming increasingly concerned about the risk of damaging unintended consequences.
Our research tells us that post reforms customers will expect their insurance provider to arrange recovery of compensation for injury, just as they do now. But compare and contrast the customer journey post reforms. The genuinely injured claimant will be presented with greatly reduced compensation, possibly at a cost and probably without legal representation. Worst case, they will be representing themselves or seeking assistance from a CMC after feeling let down by their insurance provider.
For this reason planning and preparing for the reforms is definitely not in the long grass. Motor insurers are developing services to replace the current regime and Brokers need to keep planning too.
What will happen to customers with and without a motor legal insurance policy? April 2019 for new policy implementation is not very far away. Having heavily invested in winning and retaining their customers, brokers need to ensure the post reforms service meets their policyholders expectations as it will be the brokers reputation that is on the line.