Whiplash Reforms
Positive news for brokers, insurers and policyholders as the new Whiplash Reforms came into effect at the end of May.
Whiplash Reforms
Following numerous delays, the Whiplash Reforms were finally implemented on 31st May 2021.
This is positive news for brokers, insurers and more importantly policyholders themselves. The collective aim was to reduce claim frequency and cost, both in terms of damages and costs.
What are the ‘Whiplash Reforms’?
‘Whiplash Reforms’ is the commonly used term for the package of measures introduced by the Government to reform the way low value personal injury claims arising from Road Traffic Accidents (RTA) are managed.
They form part of the Civil Liability Act 2018. Taken together, the reforms will reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims (Source: Ministry of Justice (MoJ))
The Ministry of Justice led the reforms, which involved several legislative changes. Part One of the Civil Liability Act 2018 introduced a new fixed tariff of damages for pain, suffering and loss of amenity (PSLA) as well as banning claims being settled without a medical assessment.
The series of reforms are as follows:
1. The increase in the Small Claims Track (SCT) limit for personal injury claims arising out of motor accidents from £1,000 to £5,000
2. The tariffing of whiplash injuries sustained by vehicle occupants
3. The creation of an online portal for SCT value injury claims arising out of motor accidents (similar to the current MoJ Portal)
What does this mean in simple terms?
1. Any adult personal injury claim with an injury element worth between £1,000 and £5,000 will be allocated to the SCT if litigated as opposed to the fast track (FT).
2. Compensation for whiplash injuries with a prognosis of under 24 months will be valued in reference to the fixed tariff which will attract much lower awards than the current Judicial College (JC) Guideline assessments.
3. Those cases within the £5,000 bracket will be processed via a new online claims service/portal.
What do we know about the way the claims will be processed?
At the moment, we know that the changes involved will only relate to claims arising out of motor accidents pursued by:
- Full capacity adults who were occupants of a UK registered vehicle following an accident occurring within England and Wales
All other SCT cases will proceed in the previous manner.
The Motor Insurers Bureau (MIB) has been working closely with the MoJ to deliver a claims service/portal of reporting an RTA personal injury claim that fall within the new SCT limit and are calling this the Official Injury Claim.
There is no requirement for a Pursuer to be represented by a lawyer to proceed with a claim via this method of reporting, as the aim is to make the process as simple, unbiased, and secure as possible.
Table of Tariffs
The table below outlines the tariffs as follows:
- Column 2 - Amount as per Regulation 2(1)(a) is the total amount of damages for PSLA in relation to one or more whiplash injuries
- Column 3 - Amount as per Regulation 2 (1)(b) is the total amount of damages for PSLA in relation to one or more whiplash injuries, together with one or more psychological injuries suffered on the same occasion as the whiplash injury.
| Duration of injury | Amount - Regulation 2(1)(a) | Amount - Regulation (2)(1)(b) |
|---|---|---|
| Not more than 3 months | £240 | £260 |
| More than 3 months, but not more than 6 months | £495 | £520 |
| More than 6 months, but not more than 9 months | £840 | £895 |
| More than 9 months, but not more than 12 months | £1320 | £1390 |
| More than 12 months, but not more than 15 months | £2040 | £2125 |
| More than 15 months, but not more than 18 months | £3005 | £3100 |
| More than 18 months, but not more than 24 months | £4215 | £4345 |
Conclusion
The game changing reforms makes it is an exciting time for the insurance industry in general. We remain hopeful that the reforms will have a positive impact on claims experiences, by reducing not only the claim frequency but also the claims cost.
For further information, please contact James Fairclough - Regional Claims Manager - North West & Scotland
15.03.21; updated 14.07.2021