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UK Personal Injury Reform and New Ogden Rates Go Into Law - Jacob Maslow,

06/04/17. Personal injury reform in the United Kingdom is changing at a rapid pace. A long way back, in 1995, there was no advertising or referral fees for legal services. No win, no fee cases led to lawyers fronting the risk of losing a claim.

Changes proposed as early back as 2012 are becoming law.

Small claims limits for all personal injury claims are now £2,000 except in the case of whiplash, which allows limits up to £5,000, up from £1,000. The change will impact legal costs for clients, but harm personal injury lawyers, as legal costs are reduced.

Motorists will save an estimated £1 billion by ending claims for minor injuries. Victims of injuries will have rehabilitation paid for in lieu of cash. Fraudulent, minor whiplash claims plague the industry. Compensation for these minor injuries will no longer exist.

Curbing frivolous claims is part of the reform, but the change to the Ogden rates may prove more important to lawyers.

Ogden Rate Cut to -0.75pc

Monday, March 20 marked the passing of a new Ogden Rate change that will impact the industry. The rate has been cut from -0.75pc from 2.5pc. The rate, often called the discount rate, went into effect in 1999 to assist the court with the calculation of settlements for life-changing or serious injuries.

The rate takes into account an injured person's loss of earnings and ensures financial security.

Ogden rates haven't been changed since 2001, but the new change will provide claimants with higher compensation. Insurance companies will pay out higher rates under the –0.75pc Odgen rate rather than a discounted rate.

The insurance industry will be impacted with large personal injury claims.

The goal of the Ogden rate is to allow claimants to have the same financial situation under the new rate as they would if they were never injured. The change makes the industry "risk adverse," noting that claimants are dependent on the awarded settlement.

Insurance industry backlash will continue to rise, as the industry had hoped for a 1% - 4% rate. The reforms will have a negative impact on insurers, with the insurance sector plummeting 7% following the new reforms.

A lack of proper Ogden rate adjustments, last seen over 15 years ago, left many claimants with far less compensation and wasn't adjusted alongside interest rates. Lawyers of claimants who ran out of money due to improper Ogden rate adjustments say the rate change is long overdue.

Insurance is meant for personal injury claimants to get the care they need following an injury.

Many claimants need rehabilitation, adaptations and medical care on an ongoing basis; care that wasn't provided under the previous Ogden rate.

Insurance companies argue that rates will be higher for individuals and businesses, with comprehensive insurance plans having a potential £75 increase in rates. Insurers will pass the rate on to customers. The changes will have an immediate impact on personal injury in the UK.

Whiplash claim changes will result in lower premium costs of £50, which insurance companies promise to pass on to policyholders.

Jacob Maslow is a leading writer, research and editor in the legal field with a focus on personal injury law and a passion for all things legal related. He is the owner of and shares his expertise on the world's top media publications.

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