“Tokenistic” whiplash tariff “hard to explain to claimants”

Whiplash: Reforms have not removed friction in process

It is “very difficult to explain” to claimants why they are receiving a “tokenistic tariff amount” for their whiplash injuries, the Association of Personal Injury Lawyers (APIL) has told the government.

APIL also accused insurers of employing tactics to make whiplash cases “as uneconomic as possible” for claimants and exploiting court backlogs by making low offers.

Responding to a call for evidence by the Ministry of Justice to inform the statutory review of the figures that it is required to carry out, APIL said its “overarching position remains that the tariff approach is unsuitable, unfair, and offensive to injured people”.

While the mechanism of the tariff was straightforward, it was “very difficult to explain to a claimant the reason that they are only receiving a tokenistic tariff amount, and not full and fair compensation for their injuries”.

Since the tariff only factored in the duration of an injury, it led to under-compensation and did not “permit consideration of how the injury has impacted the particular individual and their ability to continue in their daily life”.

One of the purposes of the tariff was “to remove friction points and negotiation from the process of settling these claims”, but this had not happened, APIL argued.

“Instead, insurers tend to employ tactics to make these cases as uneconomic as possible for the claimant.

“Insurers challenge prognoses given within the initial medical report, and make offers one or even two bands below the correct tariff for that injury duration. These arguments delay settlement and increase caseloads.”

Court delays were also exploited by insurers, who were “offering lower amounts to claimants in the knowledge that claimants will not want to challenge the decision as they will have to wait up to a year to receive compensation”.

On the impact of inflation on tariff levels since they were introduced in May 2021, APIL said this meant that damages at the lower end of the tariff were between £55 and £200 lower than they should be and, at the higher end, £920 lower.

Instead of a review of tariff levels every three years, there should be an annual review and appropriate uplifts every year, it said, together with a set date on which the annual reviews must be implemented.

On litigants in person (LiPs), APIL said it was “clear that unrepresented claimants are struggling to use the system”, with the number using it “strikingly low” – it has been creeping over the 10% mark in the past year.

APIL said that for every 10 claims by LiPs, more than six calls were made to the Official Injury Claims support centre.

Although the tariff bands did reflect the “typical duration of whiplash injuries”, they did not reflect the prognoses provided by medical experts in their reports. Either tariff durations should be divided into one-month steps, or medical reports should change to specify the tariff band.

APIL added that it was “disappointed to note” that the list of consultees for the call for evidence was “weighted heavily towards defendant firms and insurers”, and the government should take into account “any potential bias as a result of this weighting”.

In its response, the Chartered Institute of Legal Executives (CILEX) described the tariff as “derisory and unfair”.

The way cases were currently split into ‘whiplash only’ and ‘whiplash plus minor psychological injuries’ was “not a suitable approach”, and instead, where any psychological injury was present, the injury should escape from the regime.

Whiplash injuries lasting over three months should also be excluded from the tariff altogether, it argued.

CILEX president Emma Davies commented: “Psychological injury can be complex, may be longer lasting than the accompanying physical injury and can have a significant impact on a claimant’s ability to work and on their relationships with family.

“This is not reflected in current compensation levels, which are set at a derisory level.”

The Association of British Insurers (ABI) recently called for the extension of the tariff beyond whiplash injuries.

Meanwhile, insurers have to report to the Financial Conduct Authority by the end of May on the savings they have made as a result of the reforms in 2021 and how they have affected premiums.

Figures published by the ABI over the weekend said the industry paid out a record £9.9bn on motor insurance claims in 2023, up 18% on 2022, with the cost of repairs and replacement vehicles rising significantly. 

The overall number of claims settled, at 2.3m, rose 10% on 2022. 

The ABI said that, adjusting for inflation, the average total cost of a settled car claim has increased by 23% from £3,500 in 2014 to £4,300 in 2023, while the average premium rose by 8%, from £505 to £543.

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