Government has decided to shelve whiplash reforms after it dropped the Prisons and courts Bill which contains the changes
The ABI has welcomed the government decision to shelve the whiplash reforms ahead of the general election on June 8.
ABI director general Huw Evans said the association was pleased that the bill would not be pushed through before the election to give the industry a chance to get a fair reform of the discount rate.
Although the government has dropped the Prisons and courts Bill which contains the reforms to how whiplash injuries are compensated, it is unclear whether the bill will be picked up in future parliamentary sessions.
Back in February, the government confirmed it would raise the small claims limit for whiplash injury to £5,000 and ban any offers to settle personal injury claims without medical advice.
But just days after that announcement, Justice Secretary Elizabeth Truss announced the decision to cut the personal injury discount rate to -0.75 from 2.5%, a move that experts have warned will cost the insurance industry billions of pounds.
Insurers have also warned that the cut to the personal injury discount rate is likely to cancel out any benefits derived from the government’s planned whiplash reforms.
Responding to the news today that the whiplash reforms would be shelved, Evans said: “We did not expect the Bill to be pushed through before the election and are pleased it hasn’t, as this would have removed the main opportunity to get a fair reform of the discount rate.
“Aspects of the whiplash provisions were also unsatisfactory, so it is better these didn’t make it onto the statute book unresolved. The task now is to win the argument for both issues to be dealt with as a priority in the new Parliament so there are no major delays to much needed reform.
“Issues like the increased cost of insurance for motorists and businesses and the £6bn bill for the NHS are not going to go away, so the incentives for a new Government to act promptly are there.”