Whiplash reforms – what you need to know

The Civil Liability Act 2018 came into force on 20 December 2018, and provides for the implementation of a number of key reforms to the way in which low value personal injury claims are dealt with. We examine the so-called "whiplash reforms" and consider their likely impact on personal injury and other claims.

What is a whiplash injury?

For the first time, we now have a legal definition of what amounts to a whiplash injury. The 2018 Act defines whiplash as:

"an injury of soft tissue in the neck, back or shoulder that is… a sprain, strain, 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". 

The definition does not include:

"an injury of soft tissue which is a part of or connected to another injury and the other injury is not an injury of soft tissue in the neck back or shoulder".

This definition can be reviewed and amended by the Lord Chancellor but not for three years after the reforms have come into force. It is however clear that there is an exemption if the whiplash is part of or connected with another non-soft tissue injury.

What will change as a result of the reforms?

Fixed tariff based system for damages

The reforms see the introduction of a fixed tariff based system for damages for whiplash injuries lasting up to two years.

The tariff system will also make allowance for minor psychological injury.

However, it will not apply to claims pursued by motorcyclists or their passengers, cyclists, pedestrians or other road users who are not using a motor vehicle.

There will also be some discretion for the Court to allow up to a 20% uplift on the tariff in certain circumstances.

The proposed tariff is as follows:

The proposal at present is that costs would remain those for small claims for injuries within the tariff.

Medical evidence required

The reforms include a prohibition on settling whiplash claims without medical evidence from an accredited medical expert.

New pre-action protocol and portal

A new pre-action protocol will be introduced as well as a portal for such claims to be used by victims.

The new portal is being developed by the Motor Insurance Bureau and will be supported by an independent review process which will work alongside other insurance industry systems such as the Motor Insurance Database. The system is intended to be predominantly online and user-friendly so it can easily be utilised by litigants in person. A contact centre will be set up for those who cannot use the digital offering.

The portal will also run separately from the current Claims Portal used for higher value, Fast Track claims.

Testing of the system was due to be introduced in November 2019 with a view to implementation in April 2020. However, because the new portal requires a new pre-action protocol which has yet to be discussed by the Civil Procedure Rule Committee, implementation in April 2020 looks doubtful.

Raising the small claims limit

The small claims limit for personal injury arising from RTA claims will be raised to £5,000 (excluding vulnerable road users) and to £2,000 for all other personal injury claims.

This does not require primary legislation and can be implemented through a change to the Civil Procedure Rules.

It is anticipated that the rule change will be introduced in conjunction with the whiplash reforms.

What is on the horizon in 2020?

It was initially envisioned that the reforms would be implemented by April 2020. Whether this will happen remains to be seen.

It is expected that once the reforms have been implemented, the result will be that more claimant firms will withdraw from the personal injury market because costs will no longer be recoverable for modest whiplash and personal injury claims. The Ministry of Justice says that whiplash accounts for 85% of all road traffic accident personal injury claims.

Claimant firms may look to new markets which will be unaffected by the changes, for example credit hire (albeit there is a suggestion that this should also be considered as part of the reforms), or a bigger focus on employers' liability and public liability claims which generally involve injuries valued above £2,000 and so will be exempt from the proposed changes.

In addition, the ABI says that personal injury costs add more than a third to the cost of insurance and the reforms will result in the cost of insurance falling as well as a considerable reduction in the amount of spurious or exaggerated claims.