Campaign group A2J said the government’s plans for personal injury reform could lead to mass redundancies of up to 60,000 people.
This will in turn affect income to the Treasury as well as having a knock-on effect on companies receiving outsourced business from law firms, the group said.
A2J said clients will be ‘frightened off’ bringing claims and case volumes handled by law firms will plummet.
The group said: ‘These proposals affect everyone practising law on behalf of injured clients in England and Wales and more importantly, they erode the rights of 60 million people forever.
‘If implemented, RTA firms, both claimant and defendant, will go immediately into run off and early closure within months. Firms practising in other areas of PI law will cease trading probably within a two-year period.’
Simon Stanfield, chair of the Motor Accident Solicitors Society, said: ‘The government’s proposals will fail to protect the interests of most claimants. We’re disappointed that they’re pressing ahead with this agenda, despite the mounting evidence of the negative unintended consequences.
‘Whilst the banning of pre-medical offers is welcome, raising the small claims limit for all PI claims and capping minor whiplash claims will fall straight into the hands of those who would exploit claimants, and the system.
‘It is still not too late for the government to take stock and allow the industry to come forward with a fairer and more proportionate programme to tackle fraudulent claims. Past cross-industry initiatives have demonstrated that so much more can be achieved by dialogue.
‘The sector should be given time to discuss areas of possible common agreement.’
A2J are urging all PI firms, teams and departments to help them influence the government by completing a survey from Capital Economics, which will forensically quantify the economic impact of the reforms on job losses and loss of Treasury income.
The results of the survey will demonstrate the economic impact for the PI Industry with thousands of job losses and significant loss of tax revenue but they need your help now more than ever. Your firm’s involvement is VITAL.
The survey will take your FD or accounts personnel about one hour to complete and the data you supply is completely confidential.