Ponsonby: Unconvincing arguments over buffer
The revised whiplash tariff received its final parliamentary approval this week, although the Conservatives warned the government that the policy “cannot be left to run on autopilot”.
It also emerged that the House of Lords’ secondary legislation scrutiny committee criticised the Ministry of Justice (MoJ) for not making clear that 90% of respondents to its review of the tariff opposed the ‘buffer’ element of the figures, which takes account of expected inflation over the next three years.
In November, Lord Chancellor Shabana Mahmood published the first statutory review of the Whiplash Injury Regulations 2021, which recommended the increase to reflect inflation since it was introduced in 2021 and included the buffer.
This meant the current range of legal fees – from £240 for injuries of up to three months’ duration, to £4,215 for injuries lasting 18-24 months – would rise to £275 and £4,830.
The House of Commons approved the regulations implementing the change last month and on Tuesday the House of Lords did the same following a short debate.
Justice minister Lord Ponsonby said that, while the buffer “could lead to some overcompensation in the short term”, not implementing it would allow the real value of claimants’ damages to decrease “and would risk significant under-compensation in the long term”.
The secondary legislation committee had drawn peers’ attention to the explanatory memorandum (EM) accompanying the draft regulations, which in relation to the buffer said only that “views differed”.
The committee said: “In fact, more than 90% of respondents (29 out of 32) said that the buffer was not effective.”
The MoJ said this was because the 90% figure “would be misleading without significant additional context”, which was that respondents’ reasons varied: those representing claimants were in favour of annual reviews to protect against unexpected inflation, while those for defendants felt the buffer artificially increased levels of compensation and undermined cost savings.
The committee said: “While it is technically true to say that ‘views differed’, the overwhelming majority of respondents said that the buffer was not effective. This information should have been in the EM, which should provide a balanced view of the arguments for and against a policy, along with a summary of the government’s response.”
Lord Ponsonby said the reasons given by both sides were “unconvincing” in the Lord Chancellor’s opinion.
The difference in tariff levels using the buffer “is not substantial enough to impact significantly on savings”, he went on. “The tariff amounts are being adjusted only to account for inflation; as such, it is our view that this does not represent a real-terms increase in claim values.”
The arguments for an annual uprating were also “not compelling”.
The peer said: “A three-year review period, as anticipated in the 2018 Act, strikes the right balance between adequately compensating claimants and maintaining a stable system that is as simple to understand and administer as possible.”
Liberal Democrat justice spokesman Lord Marks welcomed the increase but said he remained “not convinced of the merits of a tariff for damages for whiplash injuries, particularly at the higher end of the scale for such injuries”.
“Enhanced scope for greater judicial discretion” would be a better approach, he said.
Lord Sandhurst (Guy Mansfield KC), a Conservative whip, said that although the party supported the change in principle, it was concerned that the buffer “may underestimate actual inflation, leaving claimants undercompensated over time”.
He noted too “continuing concerns raised by third parties”, citing the argument of the Motor Accident Solicitors Society that the tariff system and the Official Injury Claim portal “have damaged access to justice, particularly for those unfamiliar with legal processes or without representation”. It also argued that the original tariff amounts were too low.
“This policy cannot be left to run on autopilot,” he concluded. “It must be subject to scrutiny, accountability and, where necessary, reform.
“We will support this instrument today, but we will continue to monitor closely whether the whiplash reforms are delivering on their promises of fairness, accessibility and justice.”
In response, Lord Ponsonby pointed to the MoJ’s intention to carry out a post-implementation review of the Civil Liability Act 2018 later this year.
Jonathan Scarsbrook, immediate past president of the Association of Personal Injury Lawyers, said yesterday that the way the increase has been calculated would make “a bad situation worse”, given that the tariffs were set “far too low, at arbitrary levels” back in 2021.
Writing on the association’s website, he said: “Victims receive low compensation payments of sometimes just a few hundred pounds for injuries that totally disrupt their lives. The tariff fails miserably at compensating injured victims of negligence…
“The reforms to whiplash claims have created a ‘justice gap’. The cost, time, and effort of pursuing these claims for such a meagre amount of compensation has meant that the number of these claims has plummeted dramatically since 2021. This is not access to justice.”
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