How you claim for personal injury after a Road Traffic Accident is changing dramatically from the end of this month. The Civil Liability Act 2018 is finally coming in effect from the 31 May 2021.
You may be forgiven for not knowing that a drastic change in law is a matter of weeks away, and that is partly down to the fact that the Government has no intention of running a media campaign publicising the changes to the wider public. With lockdown restrictions easing and traffic volume on the rise, adding to a busy Bank Holiday weekend, the reforms are a perfect storm waiting to happen.
Let us start by looking at what is going to change:
The Whiplash Tariffs set out exactly how much compensation a Claimant can expect to recover when suffering a whiplash injury following a Road Traffic Accident. You will see that the award starts at a mere £240 for a 3-month whiplash injury, plus an extra £20 for minor psychological symptoms, such as travel anxiety and shock. Compare this to the current JC Guidelines where the same injury could attract an award of around £1,800.00.
The new tariffs being as follows:
What is Whiplash?
Well, the Civil Liability Act 2018 defines a whiplash injury 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. So, if you suffer whiplash then you are likely to be compensated in line with the above tariff.
There is a provision to add a further 20% to damages in exceptional circumstances. Exceptional circumstances have not been defined in legislation and will be taken on a case-by-case basis.
A new online Portal by the Official Injury Claim
For anybody involved in a Road Traffic Accident from 31 May 2021, as a driver or a passenger of a motor vehicle, with injuries likely to be worth below £5,000.00, their claim will now have to be submitted on a completely new online system.
The Official Injury Claim portal is designed to be used by Litigants in Person to submit their own claims to insurance companies. The system is not currently live and goes live on 31 May 2021 so it is difficult to predict how easy or difficult it will be to use for Litigants in Person. The portal is being managed by the Motor Insurers Bureau who will also be opening a call centre with staff giving assistance to those having difficulties with the online system.
Further details on the new portal can be found here.
Where are the PI Solicitors in all of this?
You may be wondering where the Solicitors are in all of this. The new laws now mean that any personal injury claim worth under £5,000.00, and £10,000.00 overall (when you add loss of earnings, medical treatment costs and certain vehicle losses) will now be considered a small claim with no legal costs recoverable. Currently Solicitors get paid £500 + VAT if a case settles on the MOJ Portal at Stage 2 and more if the case is dropped off the Portal, and then issued. These costs will no longer be payable after 31 May 2021.
Who do the reforms apply to?
The reforms are aimed at drivers and passengers of motor vehicles. Vulnerable road users such as cyclists, pedestrians, motorcyclists, horse riders and children are excluded from the changes and their claims will continue under the current rules.
Why are the reforms being implemented?
The reforms are a direct result from insurance companies lobbying the Government to change the law surrounding compensation claims, particularly whiplash claims, given that they amount to the greatest number of claims.
By directly reducing the amount of compensation the insurance companies must pay to victims of injury, and their Solicitors, the insurance companies promise to pass on a saving of £35 to each motorist. It is yet to be seen how the insurance companies will be held to account, or whether the reforms will in fact reduce insurance premiums as promised.
Will I still be able to get legal help for an accident after the 31 May 2021?
In short, yes, but you may find it harder to find a Solicitor willing to take your case on. Personal injury Solicitors have ordinarily acted in personal injury claims under ‘No Win No Fee’ agreements, retaining a maximum 25% of the compensation awarded towards their legal costs.
However, the new tariffs make it difficult for those Solicitors to continue to act in these cases profitably. Many Solicitors are considering increasing their deductions from compensation up to 40%.
Alternatively, those not wishing to instruct a Solicitor will be able to present their claim to the insurers directly by using the Official Injury Claim Portal from 31 May 2021.
As a personal injury Solicitor, I remain committed to my clients and will continue to act for those not wishing to pursue their own claims against the insurance companies.
What the Reforms mean for Taxi Drivers
Taxi drivers have historically used a combination of claims management services and personal injury solicitors following an accident. A claims management company would normally provide a replacement taxi vehicle, allowing the driver to continue to work while their vehicle was being repaired, while a personal injury solicitor would arrange a medical appointment and negotiate a settlement of a claim.
So where do the reforms leave taxi drivers? It is anticipated that claims companies who provide replacement hire vehicles, such as taxis, will remain open for business. Recovery of hire charges is not in itself directly impacted by the reforms. The question that remains is who will recover those hire charges from the at fault party? If there’s no Solicitor willing to take on the claim, then you as the client may be asked to pursue the claim yourself directly from the third-party insurance company. This is something that many individuals may not be entirely confident or willing to do.
No doubt many in the industry will be paying close attention to developments over the new few months to see how the public react once they realise what the new rules might mean for them. However, if there is one thing that’s certain, and that’s that nobody can predict with any degree of certainty exactly what the personal injury market will look like after 31 May 2021.