Notwithstanding the intervening General Election and subsequent new UK government, the whiplash reforms in England and Wales will proceed as planned with the new regime of self-service claims beginning on 6 April 2020.
Why the reform?
The volume of whiplash claims remains around 50% higher than ten years ago, despite there being fewer accidents and improved vehicle safety. The government has introduced a number of reforms across England and Wales under the Civil Liability Act 2018 to dis-incentivise minor, exaggerated and fraudulent soft-tissue injury claims arising from road traffic accidents (RTAs). The reforms aim to reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.
What are the proposed reforms?
The Civil Liability Act will:
- Provide a legal definition of a whiplash injury and a new Protocol for these claims.
- Introduce a fixed tariff for damages for whiplash injuries with durations of up to 24 months. The tariff will provide a single figure based on injury duration in the medical report.
- Increase the ‘small claims track’ limit from £1,000 to £5,000. This will mean that claimants cannot recover their legal fees for making a successful personal injury claim below £5,000. For many, the only option may be to represent themselves.
- Introduce a self-service online ‘portal’ system for RTA claims falling within the new small claims limit allowing claimants to pursue their claim directly with insurers. The MIB is in charge of the new service which is due to go live on 6 April 2020. RTAs on or after this date will start in the new Portal.
- Introduce a ban on the ability to offer, solicit or accept offers to settle RTA related soft tissue injury claims without medical evidence.
- Pedestrians, motorcyclists and cyclists are excluded from provisions of the Act.
- 13% of personal injury firms in England and Wales expect to close their doors following implementation of the reforms. Claims Management Companies (CMCs) may move into the space vacated by solicitors and may not offer the same level of expertise.
- Claimants representing themselves will have to instruct medical experts directly and it has been suggested that the experts may not wish to deal with unrepresented claimants.
- Access to justice may be denied for claimants who are not computer savvy and it is uncertain whether there will be alternative ‘offline’ methods for making a claim.
- If claimants are put off making claims, they may rely upon the state to support their rehabilitation needs.
- The fixed tariff for damages and elimination of solicitor costs will result in substantial savings for insurers. The government estimates that motorists could see their insurance premiums cut by about £35 a year.
- The reforms may lead to a reduction in whiplash claims overall and a release of finite court time.
- It could hail the end of the compensation culture embedded in the UK.
The post-election update from the MIB suggests that the reforms are on track and the new portal has received positive feedback following the first round of testing. The next phase is due to start in January 2020 covering the full process, and at present there is nothing to suggest that the implementation date of 6 April 2020 will be postponed. Further official updates are awaited.
On January 10, 2020