Reforms to the way that insurance claims for whiplash are processed, assessed and paid have been delayed until April 2021.
The changes – typically to low-value personal injury claims arising from Road Traffic Accidents (RTA) – would have seen the Ministry of Justice increase the small claims limit from £1,000 to £5,000.
It could have meant that claimants would have had to represent themselves in court due to legal costs, while equally reducing the potential for fraud against insurers.
An advisory board member of the Society of Claims Professionals welcomed the decision to delay implementation of the reforms, which would enable the insurance industry to “fully focus” on customers during the coronavirus outbreak.
A spokesman for the SCP, which is oart of the Chartered Insurance Institute, said that implementation of the new scheme by insurers was already “proving difficult” even before the current coronavirus situation as the new updated tariffs for whiplash injuries have yet to be published.
Ashton West OBE, advisory board member of the Society of Claims Professionals, said: “While the proposed reforms to contain the proliferation of whiplash claims are welcomed by insurers, the impact of COVID-19 on insurers is creating additional pressures and demands to ensure they are able to meet the needs and expectations of their customers.”
West said that currently, exposures for motor insurers have decreased significantly as activity on the road has diminished by “something in excess of 60%”.
West added: “However, as we exit from the current restrictions and traffic on the roads increases again, there is certainly an expectation that an increase in whiplash claims will emerge again, driven by claims management activity coupled with the possibility of some people being attracted to easy money following a period of financial distress.
“However, insurers and the legal service providers that work for them are experiencing upheaval and stretch in undertaking normal business activity in meeting the needs of their customers often sustaining their business via business continuity plans with reduced staff and different ways of working.
“Meeting the expectations of customers in the current circumstances must be the priority and against this background, imposing upon insurers the need to implement an entirely new process for handling whiplash claims, scaling this up to meet demand and diverting IT resource to meet the new Portal requirements, would have placed unnecessary pressures upon them at this time.”