Personal injury firms should invest time and effort in planning

For many firms in the personal injury market the outlook on the horizon is far from encouraging and has possibly never looked so bleak. Partners, owners and investors can be forgiven for thinking about exiting the market en masse with recent news of an impending rise in the small claims limit, the removal of general damages for minor whiplash cases and also the potential for future fixed fees for clinical negligence cases.

Is this deja vu?

Industry participants may remember that we have been in ‘the end is nigh’ situation many times before:

– the ban on referral fees

– the introduction of a fixed fee regime for fast track cases under £10k

– the MOJ Portal arrangement which reduced fixed fees for fast track cases under £10k and introduced fixed fees for cases up to £25k.

– the change in recoverability of after the event premiums and success fees

And now it is the raising of the small claims limit to £5k, the removal of general damages for minor whiplash claims and also discussions on the introduction of fixed fees for certain clinical negligence cases

Let’s be realistic, there has always been and there always will be change in the personal injury market. It is what you do next that is important.

Each time there has been a change, the government, insurance industry and other bodies have expected a reduction in the number of new claims and an exit of firms from the personal injury market. Far from it, each time a change has been introduced, it seems to have hardened the resolve of the personal injury marketand it has come back fighting.

Will it be different this time?

This all depends on how much fight the personal injury market has left to give. Following change after change, market commentators have often sounded the death knell of the volume personal injury market, but it is yet to happen.

Undoubtedly, the current proposed reforms are by far the most challenging yet for the personal injury market. Those who invest time and effort in planning now before the changes come into effect will ride out the storm and may even gain market share.

Whilst the potential changes are yet to come into effect and the far-reaching impacts of the removal of general damages for minor whiplash claims yet to be felt, as General George Patton once stated “.” Nobody knows what the future will hold for firms, but waiting until everyone knows the impact of the changes might mean it is already too late.

Good planning now, including increasing the use of technology and improving business efficiencies, cost reduction and diversifying or growing into other sectors is just the start of the journey for the personal injury law firm of the future.

One thing is certain, the changes are coming so start planning early. Plan for the worst case scenario and ultimately, the changes might not be as bad as you had feared.