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Life after the Whiplash Reforms – what price access to justice?

Carl Waring

Carl Waring

|  10th November 2022  |

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“For too long, some have exploited a rampant compensation culture and seen whiplash claims an easy payday, driving up costs for millions of law-abiding motorists.

These reforms will crack down on minor, exaggerated and fraudulent claims. Insurers have promised to put the cash saved back in the pockets of the country’s drivers.”

(Justice Secretary Elizabeth Truss, quoted in the Government’s Press release of 17th November 2016)

“The cost of car insurance continues to rise, with UK drivers now paying £586, on average. That’s according to the latest car insurance price index, powered by WTW. The figures show a £72 (14%) increase in the past 12 months. This is the highest yearly increase to car insurance prices in the last 5 years.”

(Quote taken from price comparison site, ‘Car Insurance price index’ document, October 2022)

In 2016 the government launched a formal consultation on proposals ostensibly aimed at reducing the numbers of whiplash claims legitimately brought by the innocent victims of road traffic accidents.

In doing so, the government embarked upon what many of us believed was a charm offensive on behalf of the insurance industry, to win over members of the public who may have been forgiven for showing scepticism over claims that legislating out of existence an area of law which merely sought to put right, wrongs, was a good thing for the public in general. As if giving away someone’s ability to put right a wrong done to them, was ever in their best interest.

The content and language of the press release of November 2016, was telling. Attempts to win us over, came in the form of bold claims, often made without referral to links or reference points that would enable us to confirm whether they were factually true. So, the statement:

 ‘Whiplash claims are 50% higher than a decade ago’,

was something the truthfulness of which we were expected to just accept as being correct.

Similarly, carrots were dangled in the form of what appeared to be arbitrary figures of how much we’d all save each year on our car insurance if we just stayed quiet whilst people’s right to bring a certain type of personal injury claim got put through the shredder. So:

“Capping compensation would see the average pay-out cut from £1850 to a maximum amount of £425.”

We were told in the same PR release that the government had received a promise from the ABI (Association of British Insurers), that leading insurers were ‘pledging to pass 100% of savings onto motorists.’

Civil Liability Act 2018

The government and the insurers won the day and after delays in implementing the new rules the Civil Liability Act 2018 finally came into force in May 2021. The principal changes the Bill brought in can be briefly summarised as:

  1. The small claims limit for road traffic accident claims involving personal injury was increased from £1000 to £5000. (Exemptions include pedestrian claims, motorcycle accident claims, cycling accident claims, horse riding accidents and claims involving children).
  2. Whiplash injury is now defined in law as being a ‘a soft tissue injury of the back, neck or shoulder.’
  3. A new whiplash tariff was introduced which laid down set compensation figures for whiplash injuries. The fixed amounts range from £240 for whiplash lasting up to 3 months and £4125 for a whiplash lasting between 18 to 24 months. If you suffer a whiplash injury lasting between 9 and 12 months, you will receive the sum of £1320 in compensation; around 60% less than what the same injury claim would have been for claims brought before 31st May 2021.

In addition, a new Claims Portal was introduced aimed at encouraging claimants in person who suffer whiplash injury in an accident that was not their fault, to pursue their own whiplash claims and other minor injury claims against the driver at fault for the accident The portal has not been without its teething problems to say the least.

However, given the reduction in damages available to claimants who are successful in bringing a whiplash claim and the requirement to use the portal for RTA personal injury claims of less than £5000 in value, it isn’t surprising to read in the Law Gazette that the number of motor claims fell considerably in 2021, down by almost 20%.

(The latest Ministry of Justice figures for the third quarter of 2022, reveal that personal injury claim levels recovered slightly for the first time since 2020).

Overwhelmingly, though, the government and the insurance industry has achieved what it set out to. Mark Maxwell Scott, Executive Director of ACSO, (Association of Consumer Support Organisations) was quoted in the Law Gazette as saying:

“From the pre-pandemic mark of 653,893 claims in 2019, the incidence of motor injury claims has plummeted by a quarter of a million since; a drop of under 40 per cent in three years.”

Job done.

So why are our motor insurance premiums going up by new yearly highs? After all, you may remember the ABI pledged ‘to pass 100% of savings onto motorists.’

“Soaring inflation, rising accident frequency due to a post-pandemic increase in road traffic, higher used car prices, and a supply chain crisis resulting in more costly repairs have caused the biggest annual jump in premiums for five years”, according to the UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, Tim Rourke. We don’t doubt the veracity of what he says.

Nevertheless, it is a bitter pill to swallow to find that after the government and insurers have succeeded in taking away access to justice for many thousands of injured motorists, the promised payback to motorists in the form of much-reduced motor premiums seems as far away from becoming a reality as it ever was. If it ever was. Whether access to justice being taken away on the promise of a few gold coins in return was ever a price worth paying is doubtful – correction, it wasn’t. Still, if you are going to promise to give something back, at least do it.

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