MoJ launches call for evidence on whiplash tariff

Chalk: Report has to be before Parliament by end of May

The Ministry of Justice (MoJ) has launched a call for evidence on the whiplash tariff to inform the statutory review of the figures that it is required to carry out.

The MoJ said the review would take into account “inflation and changes in the claims sector”, but not the extent to which the whiplash reforms had “achieved their overall policy objectives”.

The Civil Liability Act 2018 requires the Lord Chancellor to review the tariff every three years and lay a report before Parliament – this means Alex Chalk has until 30 May to do so.

The MoJ said he would “consider the likely implications of the different possible review outcomes, including the overarching reform objectives of reducing the number and cost of whiplash claims, before a final decision is made”.

The tariff delivered a radical reduction in the level of damages for whiplash injuries. For example, the average award for a whiplash injury with a prognosis period of nine months prior to the reforms was around £2,600; under the tariff, it is £840.

The call for evidence asks whether the injury duration ranges in the tariff table, beginning with ‘not more than three months’, reflected the “typical duration” of injuries and whether splitting the tariff into ‘whiplash only’ and ‘whiplash plus minor psychological injuries’ was a “suitable approach”.

It also probes the experience of unrepresented claimants and the tariff’s impact on the volume of whiplash settlements, the composition of the claims market and caseloads.

The MoJ also wants to understand the “real impact of inflation” since the introduction of the tariff in May 2021, including the impact on claimants’ damages and whether the consumer prices index was the right measure to use.

Respondents are asked to consider any “political, social, technological, legal, environmental or other developments since the introduction of the tariff rates that are relevant to the review”.

In his foreword to the call for evidence, justice minister Lord Bellamy said: “The tariff represents the government’s intention to ensure genuinely injured claimants receive proportionate compensation based on evidence.

“The government is committed to ensuring, through regular reviews of the tariff, that this remains the case.”

Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, commented: “The statutory review comes after a long period of high inflation, and given that the tariff was set at a very low level to begin with, we would expect to see a substantial uplift.

“This is only one element of the scrutiny the whiplash reforms are currently under, with the Financial Conduct Authority and the justice select committee conducting enquiries and many eyes fixed on what the Supreme Court makes of the insurers’ mixed-injury appeal hearing later this month.

“With claims numbers well down on pre-reform levels but average insurance premiums going through the roof, there are many serious questions which need to be asked about the motivation of the original reforms and whether they were ever in the consumer interest.”

Andrew Wild, head of legal practice at First4InjuryClaims, said: “The only conclusion that can be drawn from this review is to uprate the tariff with immediate effect.

“Accident victims have already been short-changed by the current tariff, which does not reflect the unprecedented hike in inflation, and must not be left out of pocket any longer by a redress scheme which, despite launching less than three years ago, is already out of date.”

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