MASS’ Simon Stanfield on the whiplash opportunity

Insurance Post, 23 May 2017

  • MASS' Simon Stanfield on the whiplash opportunityUntil the Prisons and Courts Bill version two is published, there is an opportunity to agree on how to tackle fraud and regulate CMCs
  • Insurers and claimant lawyers have an interest in creating a regulated market that deals with claims in an efficient and orderly manner
  • There is certainly scope for all parts of the market to work together

The delay in whiplash reform should not be wasted, says Simon Stanfield, chair of the Motor Accident Solicitors Society, urging all parties to grasp the opportunity.

We are in the eye of the whiplash reform storm. The early General Election may have put a halt to the legislation, but this is almost certainly only a temporary delay. The force of the legislative storm will reappear sometime after 8 June and this short period for calm and reflection will have passed. It should not be wasted.

Until the second version of the Prisons and Courts Bill is published, probably in an amended form to include, among other things, the government’s view on the future of the discount rate, there is an opportunity. This should be grasped by everyone in the sector, insurer and lawyer alike, before it is too late.

Criticism of the proposed reforms has been, and no doubt will continue to be, rejected as being self-interested. Creating a claims landscape where it is likely that many claims will be pursued in one way or another without independent, professional legal advice is naturally never going to go down well with lawyers. The reality is more complex. It is supported by collective experience of past attempts at meaningful reform and a deep understanding of the claimant market.

The main components of the proposals – the introduction of a fixed tariff system and raising the small claims limit – may partly achieve some of the broad aims sought by the insurance sector. They will, however, hurtle us down a path that is both predictable and unpredictable. The complexity of handling motor accident claims is disputed, but wait until insurers have to deal with many thousands of customers, themselves demanding a fair resolution following a motor accident, either dealing with them directly or as a ‘litigant in person’. Or when a claim, encouraged and guided by a resurgent and aggressive claims management companies market, is pursued through a reformatted portal. It is not in the interests of either side in this debate, and certainly not in the interests of the customers – injured victims or customers seeking repair and recompense – to seek this outcome.

Get together

The two sides will certainly not agree on everything, but if we can look deeper than the headlines on fairness or cost, we all have an interest in ensuring that the reforms create a regulated market that deals with claims in an efficient and orderly manner that works in the interests of our customers/claimants.

There is certainly scope for us to work together, as the two sides have in the past, to guide the government on the wider elements of any new reform package – tackling fraud, strong enforcement by the Solicitors Regulation Authority and robust CMC regulation. Record fines for CMCs found guilty of millions of nuisance calls is one thing, but getting the money from a liquidated firm is another, as the 3% figure of fines actually paid demonstrates. We all need to ensure that the recommendations of the Brady review into CMCs and even tougher measures are introduced comprehensively, while ensuring that the transfer of the CMC regulator to the Financial Conduct Authority takes place before any further reforms and is adequately resourced.

There is also the issue of timing. The delay in the Bill means that there is increased pressure upon full implementation originally planned for October 2018, of all the necessary component parts of the proposed reforms. Whether all, or some, of these components, such as a reconfigured portal, are ready in time remains to be seen.

The Motor Accident Solicitors Society remains of the view that these proposals are unfair and fundamentally flawed in their rationale, but that will not stop us seeking to engage the government and the insurers to mitigate some of the worst of the consequences of the reforms as they stand. Choppy waters are undoubtedly ahead. We should take full advantage of this lull in the storm.

Simon Stanfield is Chairman of MASS (Motor Accident Solicitors Society) and Partner and Head of RTA Technical Claims at Simpson Millar, Manchester

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MASS promotes the highest standards of legal services through education and representation in the pursuit of justice for victims of road traffic accidents.