NAHL Group PLC (LON:NAH) shareholders were licking their wounds on Thursday after the government announced plans to clamp down on insurance claims for whiplash.
The restriction potentially spells bad news for legal services provider NAHL and its National Accident Helpline business, which earns a commission for vetting personal injury claims and passing them on to solicitors.
The Government's proposals seek to restrict the ability of sufferers of minor whiplash injuries to claim compensation and to raise the upper limit for the small claims court for personal injury claims from £1,000 to £5,000.
NAHL said it would be reviewing the content of the consultation document published today by the Ministry of Justice and would respond appropriately, although seeing as these changes were first flagged in last November’s Autumn Statement this has been a car crash taking placing in slow motion for some time.
The company, which has been diversifying into complementary areas of legal services such as conveyancing, said it had continued to plan for a range of potential outcomes on the government's investigation.
“As announced at the group's interim results, we have been building closer relationships with our key Panel Law Firms, and expect that the new regulatory environment will give us the opportunity to play a more pro-active role in the entire conduct and financing of a PI [personal injury] case in the medium to long term,” NAHL told investors.
The group is currently trialling an initial small proportion of its enquiries through commercial and structural arrangements that are different to those it normally deploys and will provide an update on this initiative in the group's full year results, which are normally released in March.
The shares, which plunged from 384p to 278p when George Osborne announced the investigation into personal injury claims in his Autumn Statement last year, plunged to 187p today from 230p last night, before recovering to 196.5p, down 12.7% on the day.