For many years, the numbers and costs of whiplash claims have spiralled and therefore, insurers have paid out billions of pounds which has inadvertently led to increased premiums for motorists and businesses running commercial fleets.
New protocols under The Civil Liability Act 2018, also known as the “Whiplash Reforms”, have been formed to combat the UK’s compensation culture. After years of extensions and following the publication of rules and regulations, it has been confirmed that the Whiplash Reforms are due to take effect on 31st May 2021. The Reforms restrict the amount of damages payable for claims of whiplash and the tariffs introduced will significantly reduce the level of award in compensation compared to current levels.
The small claims limit has increased from £1,000 to £5,000 for adult road traffic accident (RTA) injuries (for pain, suffering and loss of amenity only). Furthermore, to fall within the small claims track, the overall claim must be valued at no more than £10,000 in total.
All claims to which the protocol applies must be submitted via the Official Injury Claim portal (OIC portal). More than 90% of RTA claims for injuries are expected to fall within the new small claims limit and it is expected that most customers will manage their own claim through the OIC portal, without legal representation.
Within 30 days of making a claim, customers must:
For responses not received within 30 days, an automatic acceptance of liability will be submitted in the OIC portal.
There are exceptions where claims are not covered by the new protocols, such as:
To control costs, the Whiplash Reforms set out the tariffs to be applied to whiplash injuries that last up to 24 months. Furthermore, where the claimant has suffered a minor psychological injury, an additional amount of compensation will be added to the tariff amount.
The tariffs are as follows:
| Duration of injury | Amount – Pain, suffering and loss of amenity (PSLA) only |
Amount – PSLA and minor psychological damage |
| No more than 3 months | £240 | £260 |
| More than 3 months, but no more than 6 months | £495 | £520 |
| More than 6 months, but no more than 9 months | £840 | £895 |
| More than 9 months, but no more than 12 months | £1,320 | £1,390 |
| More than 12 months, but no more than 15 months | £2,040 | £2,125 |
| More than 15 months, but no more than 18 months | £3,005 | £3,100 |
| More than 18 months, but no more than 24 months | £4,215 | £4,345 |
In ‘exceptional circumstances’ the regulations allow claimants to apply for up to a 20% uplift in the tariff. This may include claims where the whiplash injury was exceptionally severe, or the amount of PSLA has been increased as a result of the claimant’s circumstances.
It is also important to note that before any payment can be made to settle a claim, medical evidence must be provided. This is intended to further reduce fraudulent or exaggerated claims.
It is vital that you provide your insurance broker’s claims team with all supporting documents and evidence as soon as possible after the accident to ensure they have sufficient time to establish liability. Ideally this will be at the point of first notification. Supporting documents and evidence may include:
Due to the increase in the small claims limit from £1,000 to £5,000, claimant solicitors will no longer be able to recover their costs from the defendant’s insurer, and they will now be limited to a recovery at a fixed cost. From 31st May 2021, where a claimant chooses to pursue a claim through a solicitor, they may be liable for the additional costs that can no longer be recovered by their solicitor.
For businesses operating commercial fleets, these Reforms can offer several potential benefits. Firstly, due to the fixed compensation awards being lower, the cost of claims is likely to be reduced. Also, because legal costs will be irretrievable in most cases, solicitors will not be able to retrieve funds through your insurer and in turn this should help to maintain premium costs. Finally, the introduction of the 30-working day deadline ensures that these claims are dealt with promptly.
However, without the appropriate reporting process of notifying your insurance broker and failing to upload supporting documents and evidence to the OIC Portal within the 30-day limit results in an automatic admission of liability, which is likely to increase claims costs.
SRIS Claims Director - Motor, Robert Wright, comments “Early reporting is a must, and it will allow us to help you. After any incident, policyholders and drivers must respond quickly to requests for information. Having the right reporting processes in place to provide us with meaningful information in a timely manner is vital as this will allow us to ensure liability is quickly established.”
For more information on the Whiplash Reforms and how this may impact you, please contact your Account Executive, or get in touch with our expert team.
This article is for informational purposes only
Sources
https://www.legislation.gov.uk/ukdsi/2021/9780348220612/pdfs/ukdsi_978034822061
https://www.legislation.gov.uk/uksi/2021/195/regulation/3/made