The government plans to introduce changes to the personal injury claims process. The changes will affect the amount of compensation claimants receive and include:
- tariffs for some whiplash injuries from road traffic accidents, in response to a rise in fraudulent claims
- the small claims limit increasing from £1,000 to £5,000 for road traffic accidents not including pedestrians, cyclists, motorcyclists and horse riders, and from £1,000 to £2,000 for other claims
- a new personal injury discount rate plus regular rate reviews, with an expert panel advising the lord chancellor
The changes to the discount rate were introduced in July 2019.
The changes to whiplash claims and the increase in the small claims limit were originally planned for April 2020. However in February 2020 the government announced that it would delay this to 1 August 2020. Following the COVID-19 pandemic, the government announced in a ministerial statement in April 2020 that the reforms will be pushed back further to April 2021.
The delay is to allow more time to prepare for the changes, including putting in place changes to the Civil Procedure Rules.
The whiplash tariffs and personal injury discount rate changes are part of the Civil Liability Act 2018. New regulations giving full details will follow.
The small claims limit will increase at the same time. Claimants will in future be able to make their claim directly with insurers through an online portal.
The small claims limit increase, along with new tariffs, will lead to more cases being processed as small claims. Claimants will in most cases have to pay their own legal costs, even if successful. For many the only option may be to represent themselves.
We’re concerned these changes are being introduced through regulations and will not receive full parliamentary scrutiny.
We are in regular correspondence with the Ministry of Justice on this issue.
- tariffs for whiplash injuries – cause of injury should not influence the amount of compensation
- low tariffs that will not adequately compensate people with whiplash injuries
- the insurers’ report to parliament, explaining savings have been passed to motorists, but this should come sooner than 2025
- a ban on offers from insurers before medical examination
- the government tackles whiplash fraud instead of introducing reforms that affect legitimate claims
- judges are able to increase compensation in exceptional circumstances
- the government and medical experts create definitions of ‘whiplash’ and ‘psychological injury’
- the government clarifies clauses in the act about reasonable steps to mitigate injury
- banning insurance offers before medical examination for all personal injury claims
Small claims limit
- preventing road traffic accident victims with small claims recovering their legal costs
- proposals to restrict increases to the whiplash small claims limit by linking them to inflation
Personal injury discount rate
- the lord chancellor setting the new rate based only on the Government Actuary Department report, without advice from an expert panel
- regular personal injury discount rate review, to reflect variable interest rates
- the lord chancellor taking advice from an expert panel when reviewing the rate in future
- an independent expert panel sets the rate without the lord chancellor’s involvement
- government commissions more research to justify changes to the discount rate, particularly on how claimants invest their damages
What this means for solicitors
More personal injury cases will be treated as small claims. Many claimants may decide not to be represented by a solicitor, as they will not be able to recover their costs.
What we're doing
The government announced that it would delay the implementation of the changes to whiplash claims until 1 August 2020. We continued to highlight our concerns about the impact of the proposals on access to justice, and have written to the new minister. The implementation was then further delayed to April 2021 due to the coronavirus (COVID-19) pandemic.
We continue to lobby government about the increase to the personal injury small claims limit and changes to the discount rate.