It was a decision that earned widespread acclaim from the insurance industry – but it seems that whiplash reform may not be over the line just yet.
That’s because a High Court decision has thrown doubt over plans to introduce fixed legal fees, according to one barrister, just a day after the Ministry of Justice revealed plans to cap whiplash payouts.
The case highlighted by Daniel Frieze, barrister and head of the personal injury group at St John’s Buildings, was that of Merrix v Heart of England NHS Trust in which a claimant argued successfully that the existing system of cost budgeting would be sufficient to gather fair fees. The judge agreed that a budget fixed the amount of recoverable costs, which should only be reduced if there is good reason.
According to Frieze, this casts doubt over the government’s proposed changes to raise the small claims track from £1,000 to £5,000 and to introduce a ban on claims without medical evidence. The government’s move follows a recent Department of Health consultation into fixed costs in medical negligence claims up to £25,000, as well as a review by Lord Justice Jackson of caps for all civil litigation with a value up to £250,000.
“This ruling clearly shows the government that continued wholesale changes to solicitors’ costs may be an unwelcome distraction,” he said. “In particular, the time, effort, judicial and lawyer training should not be thrown out to pursue an agenda which many consider riddled with self-interest and short-term political gains.
“Cases like this also emphasise that the present cost regime is working, and will hopefully force those in positions of power to rethink their approach. The current system is underpinned by the notion of fairness, and the focus should be placed firmly on tweaking the current system to prevent misuse, rather than attempting wholesale change.”
The claims come after insurance industry bodies had roundly welcomed the changes with James Dalton, director general of the Association of British Insurers, declaring that the “gravy train must stop.”
“People want an insurance claims system that provides compensation and support to those who genuinely need it,” Dalton said. “What they don’t want is to be plagued by spam calls and texts from ambulance chasers, while personal injury lawyers continue to profit from a broken system in urgent need of reform.”
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