The One Broker Ambulance Guide to Whiplash Reforms
In this article, One Broker Ambulance’s Rob Rowley takes a look at the Whiplash Reform Programme, which is due to come into force this summer – and explores some of the potential benefits for your Motor Insurance premiums.
For many years the cost of Motor Insurance has been adversely affected by the number of insurer payouts for personal injury claims. After much debate, the UK Government proposed action to halt the escalating cost of Motor Insurance by introducing the Whiplash Injury Regulations (also known as ‘Whiplash Reforms’) as part of the Civil Liability Act.
The Act gained Royal Assent in late 2018 and outlines actions to reform personal injury compensation with the intention of establishing a fairer system for all.
When will Whiplash Reforms come into force?
They are due to be passed into law on 31st May 2021.
Why are Whiplash Reforms being introduced?
In part because there are so many whiplash claims in the UK. According to the ABI, 1,500 cases are reported in the UK every day, costing the insurance industry more than £2 billion every year.
Did you know that since the mid-2000s there has been a 40% increase in personal injury claims, although the number of accidents on UK roads has fallen by 30%?! 
The reforms are therefore intended to challenge ‘compensation culture’ and reduce the number of claims.
What will change?
The reforms mean that the road traffic accident (RTA) limit in the small claims court will increase from £1,000 to £5,000. This means that more low-value cases will be processed by the small claims court. There will also be an online portal introduced so individuals can manage their own claims without legal representation.
In addition, a new fixed compensation scale for whiplash claims will be introduced for those claimants who have a recovery period of up to two years. This will mean fixed levels of compensation, which you can learn about here.
Significantly, the reforms will introduce a ban on settling whiplash claims without medical evidence. This is to prevent defending insurers from paying small claims without investigation.
It is important to note, however, that claims involving children (or other protected persons) will not be subject to this small claims track.
What does this mean for me?
At present, a claimant can pursue a claim for personal injury estimated at over £1,000 using the services of a solicitor. Their costs can be recovered from the liable third party and their insurers.
The reforms mean that a claimant who wishes to use a solicitor for a personal injury claim below £5,000 has to fund their own legal costs. Consequently, any resulting pay-out is likely to be reduced, especially for lower-value injury claims.
Plus, insurers also have a maximum 30-day period in which to make a decision on liability, so prompt reporting of claims is crucial.
It is important to mention that claims for serious and extensive personal injuries sustained through an RTA will remain unchanged. The claimant will still be able to recover their legal costs from the third party liable for the accident (or their insurers).
It is estimated that 90-97% of all personal injury claims suffered as a result of a road traffic accident will be affected by the new whiplash compensation tariff . This will result in reduced claims payouts, while the cost of legal advice will be covered by the person pursuing the claim.
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If you’d like to discuss your Motor Insurance, either for your personal or fleet vehicles, don’t hesitate to get in touch today!
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