The Ministry of Justice may have pushed back the implementation date of personal injury claims reforms to 2020, but a legal expenses insurance expert believes the industry shouldn’t stall with its D-day plans.
“It comes as no surprise to us that the reforms have been further delayed, however this doesn’t mean that plans for a post-reform world should stop,” said Richard Finan, distribution director at Arc Legal Assistance. “While the delay does provide some additional planning time, if the reforms do come into place in April 2020, motor legal expenses policies sold from April 01, 2019 will potentially result in claims that fall under the new regime.
“Providers need to act now to ensure they have a product that is fit for purpose come next April.”
In the view of Arc Legal, which provides specialist legal expenses and add-on insurance products in the UK and Ireland, the opportunity to continue planning must be seized instead of shelving plans for later. The firm itself has come up with customisable models in line with the imminent changes. Among the reforms are plans to increase the small claims limit from £1,000 to £5,000 for personal injury claims resulting from motor accidents.
“It is inevitable that the commercial framework of motor legal expenses will have to change, due to the inability to recover legal costs for cases falling within the small claims costs, which will account for the significant majority of personal injury cases once the reforms come into place,” continued Finan. “That said, the reforms also present opportunities to provide a motor legal expenses product that provides measurable customer value.
“We have spent significant time developing servicing models in response to the proposed changes that can be made bespoke to our partner’s specific requirements. Our approach is flexible, and we can work with our partner’s choice of service provider.”
The distribution director said a key driver is ensuring that legal expenses continues to provide value to customers, adding that Arc Legal is also focused on embracing digital servicing options as part of efforts towards establishing efficient and cost-effective models of operation.
