The Civil Liability Act was
passed in December 2018. The objective of the Act was to
reduce the perceived number of exaggerated and fraudulent
road traffic accident claims, and the intention, really, is to reduce the motor insurance premium
ultimately payable by the motorist. The legislation introduced a legal
definition for whiplash injuries. It brings into play a tariff of damages, where the recovery
period is up to two years, and at the same time introducing a ban
on insurers from settling injury claims, without the production of medical evidence. The tariffs have yet to be
set by the government, although at same time as introducing the reforms, the small claims court limit for
motor personal injury claims will increase from one thousand
pounds to five thousand pounds. This means that for those claims, the
legal fees that are recovered at the moment, won’t be recovered in the vast
majority of claims. We believe as much as 90 per cent. Well, there are some
exceptions to the Act, and these relate to vulnerable road users and these include pedestrians, cyclists motorbikes and their passengers and
also to non-whiplash personal injuries that won’t be subject to the tariff. However, they will be subject to the
new small claims court limit. The tariffs have yet to be set and the rules have yet to be written
for the increase in small claims court. However, the schedule is for April 2020, following a pilot exercise
in October, 2019. This will have a major impact on
motor legal expenses insurance. For those policies sold after April 2019, they will run into the post-implementation
period of the reforms. This legislation makes the purchase of
motor legal expenses insurance even more important than ever. It will ensure that those injured motorists will
receive representation when they need it, and also ensures that they will
retain 100% of their damages. Inevitably, motor legal expenses
premiums will increase across the board. However motorists will
be more than compensated by the reduction in motor insurance premiums, as promised by the government
and the insurers, of £35.