Motorists across England and Wales will save up to £35 a year on their insurance as new rules on whiplash claims come into force today.
The changes brought in today are designed to reduce the number of whiplash claims made each year, with more than 550,000 in 2019/20 alone, which will allow insurers to cut premiums for millions of drivers.
The reforms include a new online portal for road traffic accident claims under £5,000 – with the aim of simplifying the process and potentially removing the need for lawyers.
The reforms also introduce a ban on settling whiplash cases without medical evidence – a practice which has occasionally opened the door to fraudulent or embellished claims.
Insurers have pledged to pass on the savings these reforms will create to drivers – worth a total of £1.2 billion.
The Lord Chancellor, Robert Buckland QC MP, said: “For too long the system for making whiplash claims has been open to abuse by individuals looking for an easy payday – with ordinary motorists paying the price.
“Our changes, which come into force today, will put an end to this greedy opportunism and ultimately see savings put back into the pockets of the country’s drivers.”
Dominic Clayden, Chief Executive of Motor Insurers’ Bureau (MIB), who operate the new Official Injury Claim online claims portal, said: “We are pleased to have delivered on our remit to build a service that meets the requirements of these important policy changes.
“MIB’s focus has always been about making sure the new legal process is as easy and straight forward as possible for anyone who might need to make a claim.
“To make sure the service works well for everyone we will continue our work with the Ministry of Justice to listen to feedback and to make further enhancements.”
Key changes that have been introduced today include:
A new digital portal to make a claim for any road traffic related personal injury valued at under £5,000, including claims for whiplash. This means claimants can settle their own claim without the use of a lawyer if they wish. It is anticipated that the majority of road traffic accident claims will use the portal in future.
Increasing the small claims track limit for road traffic accident-related (RTA) personal injury claims from £1,000 to £5,000. Therefore the majority of all RTA related claims will now proceed through the cheaper small claims track where legal costs are not recoverable.
A new fixed tariff of compensation for whiplash injuries setting out how much can be claimed for an injury, depending on how long it impacted the claimant with the duration up to two years. It provides claimants with a clear guide to how much their injury would be worth when they make their claim.
A ban on the practice of seeking or offering to settle whiplash claims without first obtaining medical evidence.
The reforms are part of measures contained in Part 1 of the Civil Liability Act 2018.
Will motorists still be able to get legal help for an accident after the 31 May 2021 though?
Elena Manukyan, a specialist personal injury solicitor, said: “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.”
Whilst there may be slight savings for motorists paying their insurance premiums, there may however be some significant negative outcomes for drivers needing to make a claim for personal injury too.
Manukyan, a partner at the Injury Solicitor, explained how the changes might affect one sector, the taxi industry, saying: “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.”