Blog Post

Update on the Whiplash Reforms

Ian Holmes • Jan 15, 2021

Announcement - Delay of one month to the Whiplash Reforms

Whiplash Reforms

The government has now provided an update on the Civil Liability Act which states that, after consideration, they have decided to delay the whiplash reforms by just one month, moving the implementation from April 2021 until May 2021.


This delay has been passed to ensure that the industry is sufficiently prepared for the new measures, in order to achieve a successful and effective implementation.


Please find below what the reforms mean


WHAT IS CHANGING?

The government is taking steps to make road traffic related personal injury claims ‘less attractive’ to reduce what is believed to be a high rate of fraudulent and exaggerated claims which contributes to increasing insurance premiums.


In summary the changes are:

1. A much reduced level of compensation for soft tissue (whiplash) injury claims that last for up to two years.

2. Increasing the small claims limit for road traffic accident personal injury claims from the current level of £1,000 up to £5,000.

3. A new online system from the government where PI claims under £5,000 can be logged for the insurer to settle

4. A medical report must be obtained before a claim can be progressed


WHAT IS THE IMPACT OF THE SMALL CLAIMS CHANGE?

Raising the small claims limit from the current level of £1,000 to £5,000 will move most (around 95%) personal injury claims from the Fast Track into the Small Claims Track. Solicitors’ fees cannot be recovered in the Small Claims Track, so Solicitors will not handle these claims ‘no win, no fee’ as they currently do. If you want to make a claim for a personal injury within the small claims track you can represent yourself as a Litigant in Person (LiP) through the new online system or pay for legal representation which could be cost prohibitive.


Alternatively if you have a Motor Legal Expenses Insurance policy that includes small claims costs this can be utilised to gain help with making a claim.


HOW WILL PERSONAL INJURY COMPENSATION PAYMENTS BE AFFECTED?

A claim will not be settled without a medical report and the amount of money paid out will be much less – between £235 and £3910 depending on the injury duration (up to 2 years). This table compares the new tariff with the current compensation payment levels.


Injury Duration                         Fixed tariff for Whiplash injuries available per claim post reform               2015 Average Payment

   Up to 3 months                    £235                                                                                                                           £1750

   4 to 6 months                       £470                                                                                                                          £2150

   7 to 9 months                       £805                                                                                                                          £2600

   10 months to 1 year            £1250                                                                                                                         £3100

   13 months to 15 months    £1910                                                                                                                         £3500

   15 months to 18 months    £2790                                                                                                                       £3950

   18 months to 2 years          £3910                                                                                                                        £4510

 

DO THE NEW RULES APPLY TO ALL ROAD USERS?

There is an agreed exemption for vulnerable road users (those without the protection of a vehicle e.g. motorcyclists, horse riders, pedestrians and cyclists), children and protected parties (someone who lacks capacity to make a decision for themselves - permanent or temporary). However full information about how this exemption will be applied is not yet published.


WHEN WILL THE CHANGES COME INTO EFFECT?

The government has been working on these changes for several years however the current implementation date is expected to be 1 August 2020. However you should be aware that normally insurance policies are purchased annually so any cover chosen now will be in place for 12 months and within the likely time frame when the changes will take place.


WHAT WILL HAPPEN TO CLAIMS HIGHER THAN £5,000?

These will still be handled as they are presently. If you opt for a Coplus Motor Legal Expenses Insurance policy this will pay for legal costs up to the policy limit to pursue a compensation claim utilising the services of one of our experienced panel solicitors.


DOES MOTOR LEGAL EXPENSES INSURANCE PROVIDE COVER FOR SMALL CLAIMS?

Many policies do not provide any cover for small claims which means in the new legal rules you would have to manage your own claim or pay for services. Coplus Motor Legal Expenses policies do provide a claims service for injured customers who wish to make a small claim.


WHAT IF I DON’T HAVE A LEGAL EXPENSES POLICY – CAN YOU STILL HELP?

Having motor legal expenses insurance means that the cost of assistance with a claim is covered should you need it. However we will offer a fee based service after the new rules come into effect. This means you will be able to pay for our service to manage your claim even if you don’t have cover.


WHAT OTHER BENEFITS DOES A MOTOR LEGAL EXPENSES INSURANCE POLICY INCLUDE?

As well as providing expert assistance to make a personal injury claim within the new legal rules Motor Legal Cover provides: • Uninsured Loss Recovery – for example of your motor policy excess if you need to claim on your motor insurance to repair or replace your vehicle. Uninsured Loss Recovery can also help recover any money you missed because you couldn’t work, or replace items in the vehicle that were damaged in the accident. • Depending on the type of policy chosen cover also includes: • Motor Prosecution Defence - pays for someone to represent you, and to defend you against prosecution, if you’ve been in a road traffic accident or committed an offence. • 24/7 Legal Helpline


WILL MOTOR LEGAL EXPENSES INSURANCE BE MORE EXPENSIVE?

If you have purchased Motor Legal Expenses Insurance before then you may notice an increase in the cost of the premium for the legal cover. This is because in the current rules legal solicitors can operate a ‘no win, no fee’ arrangement. In the new rules this is not possible so this may mean that the policy is a little more expensive. However this should remain a relatively small price and offer good value for money regarding the protection that the policy will give, not just for personal injury claims. 



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