Dear Lord Keen,
Whiplash reform programme – minors and protected parties
The Association of Consumer Support Organisations (ACSO) represents the interests of consumers in the civil justice system and the reputable, diverse range of personal injury law firms and others who are united in providing the highest standards of service in support to those consumers. As such, ACSO’s members want to help ensure that the implementation of the 2018 Civil Liability Act (CLA) is effective and does not result in unnecessary consumer detriment.
On 3 July 2019 you wrote to Bob Neill MP, chair of the House of Commons Justice Select Committee, concerning the position of minors and protected parties in relation to the rise to £5,000 of the Small Claims Track (SCT) limit for Road Traffic Accident (RTA)-related personal injury claims.
In this, you stated “the Government has decided that it will exempt, for the time being, children and protected parties from the increase in the SCT limit to £5,000 for RTA related personal injury claims. This will mean that children and protected parties will not be subject to the current iteration of the IT platform and the Pre-Action Protocol.”
While this was welcomed by Mr Neill in his response of 23 July 2019, the previous decision not to exclude such injured people from the proposed tariff of damages for minor soft-tissue injuries presents a significant problem. This decision was confirmed by the recent update from the Motor Insurers’ Bureau dated 14 October 2019, which stated that the Ministry of Justice (MOJ) policy direction is that all minors and protected parties are “out of scope” from the new Small Claims Portal/Protocol.
The effect of not excluding minors and protected parties from the whiplash tariff is that they will suffer the downside of far lower compensation for their injuries without benefiting from any improved efficiencies under the new portal.
While we await news as to whether the government intends to maintain the SCT limit at £1,000 for all claimants not caught by the new regime it is nonetheless clear that, in practical terms, minors and protected parties could face considerable detriment compared with the current position.
Any such individual who suffers an injury valued below the SCT limit will not be able to use either the new portal or the existing portal (as they are explicitly excluded from both), and will have to issue traditional Part 7 proceedings on every occasion to conclude their claim. This will involve going through the full litigation process in order to seek the compensation they are entitled to, yet in a regime in which they are not entitled to recover any legal costs. This is the very situation that the new portal is intended to avoid.
This will not be an infrequent scenario as the fixed tariff of damages introduced under the CLA would place a very large proportion of such claims below the current SCT of £1,000.
Given the much-reduced sums involved, it seems highly unlikely that any solicitors’ firm would be able to fund such an action from a conditional fee arrangement, not least because district judges are generally reluctant to approve success fees of more than 10 per cent.
The availability of pre-funded products such as legal expenses insurance (LEI) would only potentially provide support for a limited number of people. The government has assumed around 50 per cent of motorists have a before-the-event LEI product (see section 5.46 of the March 2018 Civil Liability Bill Impact Assessment); furthermore not all products provide cover for children. It must also be in doubt whether such products would fund these types of claims in any event, given the uncertainty in respect of the extent of the legal fees that they would be required to indemnify.
Therefore, current government policy will create an adverse outcome for a huge number of vulnerable people, denying access to justice for the minor or protected party in question. Children in this context include people up to the age of 18, and will therefore include drivers as well as passengers.
Data from ACSO members specialising in supporting consumers who have been involved in an RTA suggests that around 85 per cent of relevant claims involving children in 2018 were for injuries with a prognosis of less than nine months, and all but a tiny proportion were of injuries of less than 15 months. Therefore, under the draft tariff numbers laid before Parliament in May 2018, most injured children would face barriers to justice if the SCT were maintained at £1,000 (which would include all injuries with a duration up to nine months), while if the SCT were raised broadly in line with inflation to £2,000 then this would include injuries with a duration up to 15 months. This would mean almost all minors would be affected.
It seems highly unlikely that it was the government’s intention for this to be the case. I would therefore be grateful if you could set out the actions which you intend to pursue to prevent this. This could be achieved by amending the provisions of the CLA, excluding minors and protected parties from the definition of “whiplash” under section 1 of the act, using discretion afforded by section 2 of the act. This would remove them from the tariff, raising their damages above the £1,000 SCT threshold and therefore enabling them to use the existing RTA claims portal. This would then put them in the same position as vulnerable road users such as pedestrians, cyclists, motorcyclists and horse riders.
Given the nature of our concerns and your previous correspondence with the chair of the Justice Select Committee, I have copied in Mr Neill and committee members, as well as the relevant MOJ officials.
Yours sincerely,
Matthew Maxwell Scott
Executive Director, The Association of Consumer Support Organisations (ACSO)