The government cracks down on whiplash claims


Long-awaited reforms to compensation claims for whiplash injuries have just come into force. From 1 June 2021, new rules in England and Wales will aim to reduce the large numbers of exaggerated claims for whiplash injuries which many insurers say have put up the price of insurance for drivers.
The Association of British Insurers (ABI), the industry body, has said that exaggerated and fraudulent whiplash claims have been costing insurers £2 billion a year. As a result of the new rules the Ministry of Justice has said that they anticipate that insurance premiums should fall by about £35 per year.

What has changed?
Anyone making a successful claim for suffering whiplash symptoms within three months of a road traffic accident (RTA) will now get a fixed-rate payout of £260, instead of the previous average payment of £1,500 to £1,600.

A tariff has been introduced to define compensation levels in accordance with the severity and duration of the injury, starting at £260:
 
Duration of injury Maximum payout
Up to three months £260
Between three and six months £520
Between six and nine months £895
Between nine months and one year £1390
Between one year and fifteen months £2125
Between fifteen and eighteen months £3100
Between eighteen months and two years £4345

All claimants must present medical reports to settle claims.

Added to this, the Small Claims Court limit for motor personal injury has been raised to £5,000. This means that lawyers’ fees will not be recoverable from an insurer for claims below £5,000.
 
There is also a new digital portal to make a claim for any road traffic related personal injury valued at under £5,000, including claims for whiplash. This means claimants can settle their own claim without the use of a lawyer if they wish; it is anticipated that the majority of road traffic accident claims will use the portal in future. When an injury claim is notified on the portal, the insurer has 30 working days to make a liability decision and any disputed liability will need to be evidenced on the portal within this timeframe. A failure to meet this deadline will result in an automatic admission of liability.
 
There is also a telephone helpline at the Portal Support Centre on 0800 118 1631 which will be open on weekdays during office hours.

The new definitions of whiplash injury
  • A sprain, tear, rupture or lesser damage of a muscle, tendon or ligament in the neck, back or shoulder, or 
  • An injury of soft tissue associated with a muscle, tendon or ligament in the neck, back or shoulder

Bad news for claims management firms
The new regulations will come as a blow to firms who specialise in handling compensation claims. These firms typically take 25 per cent of the whiplash payout but some can take as much as 50 per cent. As part of new whiplash injury regulations, the government’s new portal will enable whiplash victims to claim directly without using a claims manager and retain any award in its entirety.

Key points to remember in the event of an accident
The most important thing to remember is to get in touch with your insurer as soon as possible after the incident in order that your insurer can react to any injury claim notified onto the digital portal within the 30-day deadline. Provide them with as many relevant documents and evidence regarding the incident as possible. This may include:
  • A signed statement from the other driver
  • Any independent witness details and statements
  • Photographs of the scene of the accident
  • Dashcam or cctv footage
  • Tachograph data (for lorry drivers)
Dan Bligh, Insurance Managing Director at Scrutton Bland welcomed the introduction of the new system: “The revised regulations should make it quicker and easier for legitimate claimants to make a claim and reduce the number of fraudulent claims. And we anticipate it will be good news for all drivers, who should see a reduction in their insurance premiums.”
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