Whiplash reforms explained: What are the whiplash reforms?

Law firms are currently preparing for the 31st May as new legislation is being put into place regarding small road traffic claims. The legislation, which forms part of the civil liability act 2018, law firms are still intending to run lower value road traffic accident claims. The legislation previously had a starting date of April 2020; however, due to the Covid outbreak, it was then delayed.

The legislation will only injury claimants in England and Wales after the implication date. 

The aim of these reforms is to reduce the cost and occurrence of motor insurance in the UK. The insurance industry must learn to adapt to these new systems/reforms as automated insurance claims have been known to be particularly difficult for insurers to navigate.

Whiplash reforms explained: What are the main changes?

It has been confirmed that total damages for pain, suffering and loss of amenity will now be limited to £240 for any injuries that last for less than three months. The limit increases for every extra three months that the injuries last for, reaching £4215 for cases in which injuries last up to 24 months.

Additionally, a small fixed amount is also being added to this fixed tariff to cover any minor psychological injuries that have occurred alongside the whiplash injury for any whiplash claims made, if included in the medical reports.

This new legislation allows for an uplift up to 20% in some ‘exceptional circumstances, which is when a court may decide that the tariff they are being given should be increased as they believe that the claimant is entitled to more. For this, the Court must be convinced that the whiplash injury is ‘exceptionally severe’, providing that the claimant’s circumstances validate the increase or if they provide significant medical evidence.

Even though the legislative changes only apply to RTA claims, the Government has stated that it is still ‘still committed to increasing the claims limit to £2000 for employers’ liability and public liability claims at some point.

Another change that will come into place once the legislation is used is a ban on claims being settled without an assessment and a medical report; these medical reports may only be provided by a general practitioner or an emergency (A&E) consultant.

The Ministry of Justice has created a new Whiplash Portal that will deal with all RTAs after the long-anticipated date. This new Portal has been designed to handle any injury claims from claimants.

Whiplash reforms explained: How are firms preparing?

Subject to the approval and regulation of the Solicitors Regulation Authority, a new firm called first4injury claims will solely deal with RTA cases; the firms should be ready to commence operations in early summer.

Richard Miller, the Head of Justice at the Law Society, stated that the date that has been proposed for the legislation to come into place is welcomed; however, more detail is still needed about how the new Portal will actually work. “More information is needed on how easy the claims process will be for claimants if the insurer denies liability or if they want to challenge their level of compensation,” said Miller.

The Ministry of Justice is also working with the Civil Procedure Rule Committee to develop the supporting Pre-action Protocol and rule changes to support the reform. One of these rules is to raise the small claims track.

Also included in the legislation is rule 35.4 that is being amended to specify the evidence in medical reports that may be obtained in respect of a claim for a road traffic accident-related personal injury claim. This is regardless of whether the reports obtained are for non-tissue injury claims (regardless of if they are accompanied by soft tissue claims).

Whiplash reforms explained: What will the potential impact on firms be?

These new reforms will mean that personal injury lawyers may lose significant profits due to the fact that whiplash claims make up a large proportion of their business. This is because not only will the costs for whiplash cases decrease but so will the number of claimants.

Firms of Solicitors will see a decrease in profits as there will be a definite decrease in the number of road traffic accident cases. Claimants regularly suffer low-value whiplash injuries.

Personal injury firms may be forced to make redundancies to stay afloat, exiting the road traffic accident legal industry or maybe even closing their doors altogether. Personal injury firms have faced a number of challenges in previous years, and for some, this may be the final straw.