- Legal Futures - https://www.legalfutures.co.uk -

PI reforms in full – fixed whiplash damages to begin at £225, 1 October 2018 start date

Whiplash: claims do not routinely need a lawyer

The personal injury (PI) industry has 19 months to prepare for the reforms announced by the government today [1], with the newly published damages tariff showing that those with the most minor injuries arising from a road traffic accident (RTA) – and not just whiplash – will receive just £225 in compensation.

In the detailed response to the whiplash consultation – following this morning’s announcement of the headline changes – the Ministry of Justice (MoJ) said that though the small claims limit could be altered sooner through secondary legislation, it would introduce the reforms as a package on 1 October 2018.

It received 625 responses to the consultation paper, of which 56% were from claimant lawyers.

The MoJ said that though many respondents from the claimant lawyer community argued that the numbers of whiplash claims registered with the Compensation Recovery Unit have been falling, further study of the statistics “suggests this is not the case”.

It said differences in claims labelling “may be behind this belief” – when soft-tissue injury claims labelled as ‘neck’ and ‘back’ are considered together with those labelled as ‘whiplash’, the figure increases significantly.

The number of such claims has remained steady over the last three years at around 680,000, which is around 90% of all RTA related personal injury claims made.

The MoJ said: “There are currently substantial financial incentives for claimants to bring cases regarding relatively minor injury, or to exaggerate the severity of their injury, and Government intervention is required to tackle this issue.”

It has become “culturally acceptable” for claims to be made for very low-level whiplash injuries, it added.

The key decisions announced today are:

The MoJ’s response to the other issues raised in the consultation paper, such as rehabilitation and credit hire, will be issued “in due course”.

A final version of the impact assessment will also be published shortly and will contain a revised estimate of the expected savings in light of evidence received through the consultation process.

“The government fully expects these savings to be passed on by insurers to consumers and we will be monitoring the impact of these reforms on the cost of motor insurance,” the MoJ said.