Civil Liability Act and Whiplash Reforms?

The Civil Liability Act 2018 is an Act in relation to whiplash claims and the personal injury discount rate. 

Part 1 of the Act relates to whiplash and forms the Whiplash Injury Regulations (whiplash reforms).

What are the whiplash reforms?

The term was introduced by the Government to reform the way low value personal injury claims following road traffic accidents are managed.

The Ministry of Justice (MoJ) says the reforms will “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.”

The Civil Liability Act 2018 and the whiplash reforms will prevent whiplash claims being settled without a medical assessment and will introduce a new fixed compensation amounts.

It also means that the insurer of the vehicle at fault for the accident will not pay for appropriate legal advice unless:

  • The compensation amount for pain, suffering and loss of amenity (enjoyment / quality of life) is likely to be more than £5,000 for your whiplash injury
  • The total amount of compensation for pain, suffering and loss of amenity together with any financial losses, such as lost wages, is more than £10,000.

The compensation for pain, suffering and loss of amenity covers not only physical whiplash injuries, but also any minor psychological injuries.

How will the whiplash reforms differ from what happens now?

The main difference is, at the moment, if you have a road traffic accident and suffer a whiplash injury which is worth over £1,000, the insurers of the vehicle at fault will pay your appropriate legal costs so you can be represented by a legal expert to seek compensation on your behalf. Once the Civil Liability Act and the whiplash reforms are implemented in May, that limit will rise to £5,000. As most claims for whiplash are valued at under £5,000, the majority of whiplash cases will not have their legal representation paid for by the other side’s insurers.

Another difference is the amount of compensation you’ll receive for a whiplash injury. This has been reduced and new tariffs have been set.

Why is the Civil Liability Act and the whiplash reforms being implemented?

The number of road traffic accident cases reported in 2016/17 was approximately 50% higher than in 2006/2007, and whiplash related claims accounted for approximately 85% of those claims. It was reported by the Association of British Insurers (ABI) that there were more than 1,500 whiplash claims made in the UK every day, which costed the insurance industry a significant amount which was estimated at more than £2 billion per year.

The reforms are designed to save the insurance industry a significant amount of money which they must then pass on to their customers. This means the move is a positive one, as the Government expects that you’ll save approximately £35 on your motor insurance premiums.

Do the whiplash reforms mean I won’t be able to make a claim for compensation following a whiplash injury?

The introduction of CLA and the whiplash reforms doesn’t mean you can’t make a claim for compensation. The new reforms will introduce a self-service online ‘portal’ system called Official Injury Claim for whiplash claims that fall under £5,000 in value which will allow you to register your own claim directly with the insurers without the need for legal representation.

Under the new regulations, it’s important to note that if you want legal representation you’ll need to pay your own legal fees, whether your case is successful or not, which could leave you out of pocket. In addition, if the insurers of the vehicle at fault disputes anything in your claim, such as if the other driver doesn’t believe they were at fault, if you can pay for  legal assistance, you may have to represent yourself in court.

The information contained in this article was correct at the time of publication.

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