This week we are focusing on the welcome, and very overdue, changes to whiplash claims settlements.
What has happened?
The provisions within the Civil Liability Act relating to whiplash claims have now come in to effect from the 1st June.
In brief, the Act has introduced a new tariff of set amounts for compensation for whiplash injury claims (with a court power to apply an uplift in limited circumstances) and new rules to prevent settlements being made before a medical assessment. Alongside this, the Small Claims Track limit for low-value road-traffic accident injury claims will be raised from £1,000 to £5,000 (which means that claimants will not generally be able to recover their legal costs from an insurer), and a new Portal is being launched by the Motor Insurance Bureau (MIB) for injured parties to issue their claims without the need for legal representation.
The effect will be to reduce the incentives for lawyers to become involved, payments will be reduced and most claims should be dealt with directly.
How will a Whiplash claim now be managed?
Qualifying claims will be pursued via a new online portal – the Official Injury Claims portal (OIC). Claimants will access and manage their claim through the OIC and insurers will have 30 days to make a liability decision.
There will be two tariffs – one for whiplash only, and a second for whiplash plus ‘minor psychological injury’ (yet to be defined):
A ‘whiplash injury’ has been formally defined. Insurers have determined the changes will apply to approximately 80% of the current Road Traffic Act (RTA) injury claims.
The Small Claims Track limit for RTA injury claims will increase from £1,000 to £5,000 (subject to certain exemptions), meaning legal costs are no longer payable on claims up to the value of £5,000, and therefore ought to be less attractive to fraudsters, claimant solicitors and claims management companies – this great news!
Help from AVIVA
Thank you to AVIVA for these two videos
AVIVA have developed this video to help explain to you how the delayed notification times can push up the cost of the claim and ultimately impact their operating costs and insurance in the future.
AVIVA have also created a second video aimed at the drivers themselves which is designed to educate them on the importance of contacting us straight away and the information we need them to provide. You could consider using this as part of their onboarding or induction process for new drivers or as part of refresher training for your existing team.
Further Reading
TFP Schemes – “Whiplash” Reforms – are nearly here! | TFP Schemes
BIBA – New Whiplash reforms (biba.org.uk)
The Lord Chancellor and Secretary of State for Justice – Written statements can be found here.
Thank you to The CII (Society of Claims Professionals); Auto Legal Protection (ALPS) – our recommended Motor Legal Expenses provider, AXA and BIBA for their articles.
