A report commissioned by Access to Justice has warned that 35,000 jobs in law and other specialist firms would be at risk if the government proceeds with plans to clamp down on personal injury claims.
The Ministry of Justice (MoJ) launched a consultation last November on proposals designed to reduce the number of whiplash claims and allow insurers to cut premiums.
The government argued that the current number of whiplash claims is “unacceptably high” and savings would be passed on by insurers worth around £40 per motorist.
The consultation closed on 6 January this year.
The report for Access to Justice, a campaigning group supported by the broader personal injury sector to respond to the government’s proposed road traffic accident compensation reforms, was undertaken by macroeconomics research consultancy Capital Economics.
It found that nearly 80% of the 44,000 people directly employed in personal injury, including insurers, claims companies and medical reporting, face losing their jobs if the government proposals become law.
In addition, the economists estimated that personal injury activities support 40,000 jobs and £2.1bn value added to the UK economy through the spending of firms and employees.
Martin Coyne, chairman of Access to Justice stated: “It is extraordinary that this government is planning to destroy an entire industry and the livelihoods of tens of thousands of ordinary people for the sake of a £40 saving which won’t happen.”
Capital Economics’ Mark Pragnell, who was the lead author of the report, added: “When considering not only the lawyers but all the other jobs that are supported by this work, we estimate that up to 77,000 jobs are at risk – many in locations where alternative jobs of similar value will be difficult to find.”
He argued that the impact will be felt across the UK but especially in the South East and cities such as Manchester, Liverpool and Sheffield.
“These are not fat cat lawyers but ordinary working people earning an average £30,000 per year,” Coyne highlighted.
“These plans fly in the face of the Prime Minister’s personal pledge to ‘think not of the powerful but you (ordinary working people), when we pass new laws we’ll listen not to the mighty but to you’.”
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