How whiplash reforms will affect insurance claims

The whiplash reforms have been introduced by the Government to change the way that low value personal injury claims following road traffic accidents are managed. These changes will only affect road traffic accident claims that occur in England and Wales.

The reforms were broadly outlined in the Civil Liability Act 2018, which were initially proposed by the Government in November 2015. The aim is to tackle the increasing number and escalating costs of road traffic accidents (RTAs) and whiplash-related claims, as well as ensuring that compensation awarded is proportionate to the level of injury suffered.

What is changing?

There is now a definition for the term ‘Whiplash Injury’:

• A sprain, tear, rupture or lesser damage of a muscle, tendon or ligament in the neck, back or shoulder, or
• An injury of soft tissue associated with a muscle, tendon or ligament in the neck, back or shoulder

An increase in the small claims track limit for pain, suffering and loss of amenity for RTA injury claims has been made from £1,000 to £5,000 for accidents on or after 31 May 2021.

There is clearer guidance over the compensation levels to be awarded. There will now be two set tariffs for whiplash injuries up to 24 months. These tariffs are fixed at much lower levels compared to awards made previously:

• A lower tariff under Regulation 2(1)(a), where there is no psychological injury.
• A combined upper tariff under Regulation 2(1)(b), which includes minor psychological injuries.

Duration of injury

Not more than 3 months

Lower Tariff - Regulation 2(1)(a): £240

Upper Tariff - Regulation 2(1)(b): £260

More than 3 months, but not more than 6 months

Lower Tariff - Regulation 2(1)(a): £495

Upper Tariff - Regulation 2(1)(b): £520

More than 6 months, but not more than 9 months

Lower Tariff - Regulation 2(1)(a): £840

Upper Tariff - Regulation 2(1)(b): £895

More than 9 months, but not more than 12 months

Lower Tariff - Regulation 2(1)(a): £1,320

Upper Tariff - Regulation 2(1)(b): £1,390

More than 12 months, but not more than 15 months

Lower Tariff - Regulation 2(1)(a): £2,040

Upper Tariff - Regulation 2(1)(b): £2,125

More than 15 months, but not more than 18 months

Lower Tariff - Regulation 2(1)(a): £3,005

Upper Tariff - Regulation 2(1)(b): £3,100

More than 18 months, but not more than 24 months

Lower Tariff - Regulation 2(1)(a): £4,215

Upper Tariff - Regulation 2(1)(b): £4,345

Claimants can seek an uplift of up to 20% to the tariff amount in ‘exceptional circumstances’. These include:

• Where the degree of pain, suffering or loss of amenity caused by the whiplash make it appropriate to uplift the amount
• Where the person’s circumstances increase the pain, suffering or loss of amenity caused by the injury or injuries

How does this affect insurance claims?

Individuals injured in a road traffic accident will now be able to use a free online service provided by Official Injury Claim (OIC) to manage their claim directly, rather than involving claims management companies or solicitors. This OIC portal service will run separately to the existing Ministry of Justice (MoJ) site but will remain integrated with other systems such as the Motor Insurance Database (MID).

Compensators / insurers now have 30 working days to decide on liability, and to have all evidence uploaded to the OIC portal if liability is disputed.

To ensure that an accurate and informed decision can be made regarding liability, compensators will need to receive relevant documents and evidence as early as possible. These may include:

• A signed statement of truth from the defendant driver providing a detailed account of events
• Any dashcam, CCTV or video footage or details of where it can be obtained
• Photographs of the accident scene / damage
• Any independent witness statements or details of witnesses to be contacted
• Tachograph or tracker data if available
• Details of any emergency services that attended, including reference numbers or contact details
• Any additional relevant documents

Failure to comply to the 30 working days deadline will lead to an automatic admission of liability, so it is vital that the MID is kept as up to date as possible to enable correct signposting of claims.

The benefits

Fixed compensation awards, and at considerably lower levels than previous, are expected to reduce the cost of claims. And legal costs will no longer be recoverable for most whiplash claims. This should benefit businesses with vehicles on the road, particularly those operating large commercial motor fleets.

To reap these benefits it’s important that customers and brokers have the necessary processes in place to notify their insurer as early as possible following an accident, and to be able to provide all the documents and evidence needed to make a prompt decision. Failure to upload the evidence required within the new timeframe, particularly if liability is disputed, is deemed an automatic admission of liability, so could potentially impact on claims costs.

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