The Jackson reforms came into force on 01 April 2013, Jackson has implemented many changes which affect not only costs, but the way litigation is run. These changes featured a number of reforms to the sector, including the ban on referral fees and an estimated 60% fee reduction for lawyers handling 'low value' claims.
With the media focusing on an 'epidemic' of fraudulent claims it will come as no shock that the reforms have had a radical impact on the personal injury market. It is important to note that fraudulent claims are not as widespread as they may be portrayed in the media. Fraudulent claims make up 2% of all claims made.
Impact on Claims
The Institute and Faculty of Actuaries ("IFoA") have recently released new statistics indicating a 10% reduction in the amount of motor insurance claims made in 2013, with the cost of claims falling 33% from £354m to £238m. TUC (Trades Union Congress) along with APIL have also released statistics indicating that workplace compensation claims have fallen by 50% over the last decade. Are the Jackson reforms therefore taking effect?
If the IFoA statistics are to be trusted, this will be the first reduction in motor insurance claims in over a decade. This would indicate that the Jackson reforms over the past year have clearly had a large impact and with insurance premiums seemingly falling, it's not all bad news.
The Portal Company figures seem, at first blush, to mirror the above statistics. If we take the last eight months, however, and compare that with the same period two years ago (pre-Jackson reforms) the total number of claims is virtually identical for these periods. This supports the view of many in the industry who believe that claim numbers are returning to their pre-Reform levels.
Some reforms have had a significantly positive effect on the industry for Claimants. The expansion of the MOJ Online Portal limit to £25,000 and the inclusion of employer's liability and public liability claims has certainly streamlined the process for personal injury litigation. It is now much simpler process for all parties in low value claims.
With further reforms expected in the near future, what will this mean for the industry? If all of Jackson's proposed reforms are put into effect, will Claimants still have access to justice? Will claims volumes continue to fall? There are no easy answers.