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Compensation culture: cutting down ‘whiplash’ claims

Those who argue that a compensation culture has developed in our society – with too many people willing to seek compensation for things that have happened to them – often point to the numbers of claims made for soft tissue injuries occurring in road traffic accidents (RTAs), commonly referred to as ‘whiplash claims’

In 2015, the Government announced that it wanted to reduce the incentives on people bringing whiplash claims. It has now published a consultation paper setting out its ideas in more detail.

The package includes measures to tackle the high numbers of minor RTA related soft tissue injury claims by either:

(a) i.removing compensation for pain, suffering and loss of amenity (PSLA) following an accident or

ii. reducing compensation for PSLA by setting a fixed amount payable (£400 or

£425 if there is a psychological element) for these types of claim.

(b) reducing compensation for PSLA for other RTA related soft tissue injury claims

where recovery takes longer than for those covered by measure (a) above through

the introduction of a set tariff of compensation;

the value of the PSLA element of the claim). This would have the effect that the

legal costs of such claims would no longer be recoverable from defendants in the

majority of soft tissue injury claims, although certain costs arising from litigation

(for example the costs of issuing the claim) and a number of disbursements (for

example the cost of the medical report) could still be claimed by a successful

claimant; and

(d) ban pre-medical offers to settle RTA related soft tissue injury claims, so in future

claims could not be settled without medical evidence provided by MedCo accredited practitioners.

Measures (a), (b) and (d) will require primary legislation and the government intends to legislate as soon as parliamentary time allows.Measure (c) requires changes to the Civil Procedure Rules (CPR). There will also need to be amendments to relevant Pre-Action Protocols including the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents.

It is argued that these changes could reduce the cost of insurance claims by around £1bn annually.

The Consultation will provoke strong views, and are likely to be fiercely resisted, particularly by those who represent claimants. If implemented, the reforms could also have significant impact on Claims Management Companies.

The outcome of the consultation is not yet clear, nor, importantly is it clear when time for the required legislation could be found. But it is an issue that is unlikely to go away, even if implementation is still some time off.

The Consultation can be found at https://consult.justice.gov.uk/digital-communications/reforming-soft-tissue-injury-claims/

Written by lwtmp

November 23, 2016 at 11:02 am

Posted in Chapter 8