Martin Partington: Spotlight on the Justice System

Way back in March 2019 I noted the enactment of the Civil Liability Act 2018. One of its principal objectives was to introduce a new way of dealing with claims for ‘whiplash injuries’ suffered when a car is hit from behind, causing those in the front car to suffer whiplash. It had been planned that the new scheme would come into operation in April 2020. The Government has now announced that it will commence on 31 May 2021.

The Whiplash Reform Programme provides, among other things that:

• A fixed tariff of compensation will determine the personal injury damages claimants will receive for whiplash injuries. Until now, most whiplash claims are determined by negotiation rather than by a ruling from a judge. The tariff – set by the Lord Chancellor – will in future decide the issue. The levels of compensation will be reviewed by officials every three years.
• There will be a ban on settling whiplash claims without medical evidence. It was argued that, in the past, insurance companies paid out on small claims which had been made without any supporting medical evidence because it was not financially worth their while to resist them. The effect of paying out on unmeritorious claims was to increase the costs of motor insurance, to the detriment of motorists who did not make unwarranted claims.
• A new online official Injury Claim Service will be established which will enable claimants to source medical reports to ensure claims are supported by medical evidence before settlement.
• The Small Claims Track (SCT) limit for Road Traffic Accident related Personal Injury claims will be raised from £1,000 to £5,000. This means that the majority of such claims (which are for sums under £5,000) will no longer be subject to fast track rules, where the recovery of legal costs operates on the ‘loser pays’ principle but will be allocated to the SCT, where parties are responsible for paying their own legal costs.

It is hoped that the introduction of the Official Injury Claim Service which has been designed to provide claimants with a user-friendly digital system, supported by guidance, will enable all claimants, particularly those without legal representation, to make and settle their own claim pre-court. It is also hoped that the new system will stop unmeritorious claims from being made.

Since these changes are expected to result in insurance companies being able to reduce their overhead expenditure on motor insurance, insurers are required to provide to demonstrate that they have passed any savings on to customers.

Further information on the new scheme is at https://www.gov.uk/government/publications/whiplash-reform-programme-information-and-faq