Summary of whiplash reforms and small claims track limit increase
What are the reforms and how did they come about?
A short history
Even as the LASPO reforms, brought in to reduce the cost of personal injury claims, were only just starting to bed in, the issue of whiplash reform remained high on the Government's agenda. The introduction of MedCo and fixed cost medical reports followed, along with ongoing discussions about the banning of pre-medical offers. Then in a surprise Autumn Statement in November 2015, the Chancellor George Osborne announced ambitious plans aimed at cutting the cost of motor insurance. The initial proposals included removing the right to general damages for minor soft tissue injuries, and removing legal costs by increasing the small claims track limit to £5,000.
Where are we now?
Over the next few years, and following consultation, the plan to remove general damages altogether was modified to the provision of a tariff of compensation, albeit comprising much reduced figures compared with the Judicial College Guidelines. The proposed increase in the small claims track limit in RTA personal injury claims and the ban on pre-medical offers remained unchanged (though a reduced increase to £2,000 is now planned for EL/PL claims).
The primary legislation required to introduce the reforms is Part 1 of the Civil Liability Act 2018 which received Royal Assent on 20 of December 2018. It provides for:
- A definition of whiplash.
- The setting of the tariff of compensation for PSLA for whiplash injuries.
- A ban on pre medical offers.
- Insurers to report to the FCA on the effect/savings arising out of the reforms
Read more in the Commentary on the provisions of the Act
The increase in the small claims track limit is not contained within the Civil Liability Act 2018 and requires secondary legislation to be implemented.
There will be a new online service / IT platform through which claims falling within the remit of the reforms will be brought.
Minors and protected parties: In July 2019 Lord Keen wrote to the Justice Select Committee on behalf of the Government confirming that for the time being, children and protected parties will be exempt from the increase in the SCT limit to £5,000 for RTA related personal injury claims. This will mean that children and protected parties will not be subject to the current iteration of the IT platform and the Pre-Action Protocol (PAP).
When are the reforms due to be implemented?
The reforms are due to commence on 6 April 2020 applying to accidents occurring on or after that date.
Testing of the online portal is due to start from November 2019
What steps need to be completed before implementation?
Secondary legislation is needed to:
- Set the tariff. The Lord Chancellor must also consult with the Lord Chief Justice before setting the tariff.
- Provide for the court to apply an uplift on the tariff in exceptional circumstances.
- Specify the form of medical evidence that will constitute appropriate medical evidence of an injury.
- Specify the detail of the requirement for insurers to report on savings.
- Increase the small claims track limit.
- Implement the Civil Procedure Rule changes. The MoJ is working with the Civil Procedure Rule Committee to develop the rule changes and supporting Pre-Action Protocol.
Online portal – highlights of what we know so far
- There will be a new portal and claims process for parties. It will be run separately from the existing claims portal and will be available both to represented and unrepresented individuals.
- There will be a contact centre service for individuals who do not have access to or cannot use the digital service, and a translation.
- The online service applies to all RTA related PI claims where PSLA does not exceed £5,000 and any claims for special damages do not exceed the small claims track limit.
- The new service excludes claims for credit hire and rehabilitation.
- As mentioned above, minors and protected parties are excluded from the increase in the small claims track limit.
- As expected, the process will involve the usual stages of notification of a claim, liability decisions, the obtaining of medical evidence, an offer process and adjudication.
- The service will guard against "inequality of arms" by offering the claimant independent valuation if their claim is disputed.
- The unrepresented claimant will be helped to understand the conclusions within the medical evidence.
- There will be independent dispute resolution for both liability and quantum disputes.
- Whilst ownership of anti-fraud measures will remain the responsibility of compensators and those who represent users of the service, the system has been designed to incorporate fraud reduction initiatives and provide information to insurers to aid identification of concerns.
- Wider testing is due to start in mid-November 2019 and registration on the live web portal will be available in January 2020.
Obtaining medical evidence in the new scheme
In September 2019, following consultation, the MoJ set out its agreed approach on how unrepresented claimants can obtain medical evidence within the new process:
- The current MedCo system for the provision of soft-tissue injury claims will be extended to cover initial medical reports for all RTA related personal injury claims under £5,000.
- The provision of initial medical reports for non-soft tissue personal injury claims will be limited to GPs and A&E consultants only.
- The fixed recoverable costs regime for soft-tissue injury medical reports will be extended to apply to all initial RTA related non-soft tissue injury medical reports for claims under £5,000.
- New customer care qualifying criteria, standard service level agreements and accessible information for claimants will be developed for medical reporting organisations and medical experts.
MoJ Policy Paper Civil Liability Act - GOV.UK
Legislation Civil Liability Act 2018
Consultation: Reforming the soft tissue injury (whiplash) claims process - GOV.UK
Consultation: Future Provision of Medical Reports in Road Traffic Accident related personal injury claims - Ministry of Justice - Citizen Space
Justice Committee small claims track inquiry Small claims limit for personal injury inquiry - UK Parliament
MIB updates on the reforms and online portal developments MIB - Whiplash Reforms Programme
DWF's articles on the whiplash reforms Whiplash reforms | DWF Insurance