Whiplash damages to be reduced by new legislation

23 Mar 2018

On 20 March 2018 the Ministry of Justice announced (via the London Stock Exchange’s regulatory news service) that the Government would introduce The Civil Liability Bill (‘Bill’) in the House of Lords later that day. The Bill “will reform the law of England and Wales relating to [i] whiplash claims and [ii] the way in which the personal injury discount rate is set under the Damages Act 1996”. An early summary of the Bill is given in our blog of 20 March and a further post that day examines its discount rate aspects.

The Bill was published the following day. Its part 1 largely reproduces the whiplash content at part 5 of the lapsed Prison & Courts Bill, but the definition of ‘whiplash injury’ is now more precise, referring in terms to soft tissue damage: “whiplash injury’ means an injury, or set of injuries, of soft tissue in the neck, back or shoulder that is of a description specified in regulations”.

As in the previous Bill, the new legislation will prohibit so-called ‘pre-med’ offers, by banning the offering, soliciting or accepting of settlement before appropriate evidence of injury has been obtained (very likely via the MedCo channels). As with the ban on referral fees in the LASPO Act 2012, this will be a regulatory ban rather than a criminal offence.

The Bill also provides for ‘tariff’ general damages for pain, suffering and loss of amenity in respect of whiplash and minor psychological harm suffered at the same time. The tariff awards will be set out in regulations made by the MoJ and will apply to whiplash injuries of under two years duration (or which would have been for less than two years but for failure to mitigate). While the final amounts in the tariff await the necessary regulations, the Government’s impact assessment offers the following figures (to which we have added, by way of comparison, a column based on current Judicial College Guideline awards).

Even with the tariff, the Bill preserves reductions for contributory negligence. It also allows for increased awards in exceptional circumstances, where it appears that the maximum percentage uplift will be limited to 20 per cent.

Finally, the Bill’s impact assessment refers to proposals to increase the small claims track (SCT) limit at the same time as the reforms outlined above: “An increase in the SCT limit will be applied to all PI cases (£2k) or for all RTA PI cases (£5k). In addition to RTA, PI claims include Employer[s’] Liability (EL), Public Liability (PL) and clinical negligence (CN) claims.”

The impact assessment also indicates that the MoJ estimates that just over 90 per cent of  future RTA whiplash claims will be dealt with in the increased SCT and using the new tariff (and any changes to the Civil Procedure Rules and Pre-Action Protocols). These processes are expected to lead to lower damages awards and reduced payments of costs and the Government anticipates that the resultant savings will be passed on by insurers to customers.

The House of Lords will debate the substance of the Bill not long after Easter, on 24 April 2018, and we shall provide an update on those proceedings.



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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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