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PI firms will have 'no other choice but to close' following whiplash reform

Forrester suggests the CIO isn't respectecd by some business peers

More jobs could be lost as a result of the government's whiplash reforms than were lost in the South Wales steel industry last year, Access to Justice told Post.

Andrew Twambley, a spokesman for Access to Justice, told Post that many personal injury law firms face diminishing revenue, business decline, and even closure, as a result of government reform.

"It's going to be a matter of whether the firm can turn a profit or not. We have to ensure that we can provide customers with a service and keep revenue coming in," said Twambley.

"At the current rates it is very difficult; it's barely worth taking on a case. Under the original proposals we would have been left with 23% of income."

Twambley's comments follow news that the Ministry of Justice has confirmed that there will be fixed tariffs capping whiplash compensation payouts.

The MoJ announced a ban on claims without medical evidence, saying that it expects this to cut car insurance premiums by around £40 a year.

The MoJ said it intends to raise the small claims track from £1000 to £5000 for road traffic accident related injuries. It will raise the small claims track for all other personal injury claims to £2000, in line with inflation.

"The impact will be largely on the Road Traffic Accident firms," Twambley said. "Such firms may find that in two years or so there will be no business left; they will have no other choice but to close."

Twambley added that the government reform opens a "massive door" to unregulated claims management companies and could result in significant job losses.

According to a report published in January, more than 35,000 jobs may be at risk as a result of government's whiplash reform.

A Capital Economics report, commissioned by Access to Justice, found that eight out of 10 people directly employed in personal injury would be at risk of losing their jobs.

In addition, personal injury activities support 40,000 jobs indirectly and adds £2.1bn to the economy, the report said.

Twambley said that the report would need updating in light of the MoJ's recent announcement, but stood by the general finding of industry job losses.

"We're still looking at losing more jobs then were lost in the South Wales steel industry," Twambley said.

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