What is the Civil Liability “Whiplash Reforms” Bill and how can that affect me?

By Rebecca Hennessy – Consultant Personal Injury Solicitor

 

Those who are not involved with personal injury claims on a daily basis are probably unaware how insurers (who provide insurance cover for potential Defendants in a personal injury claim) have been campaigning about the costs arising out of personal injury claims increasing over the past few years. These insurers have also petitioned the government to implement changes.
This is aimed, predominantly, at injuries caused by road traffic accidents (in particular “whiplash”).
There has been a government consultation into whether there is a “compensation culture” and despite the fact that evidence suggested a decrease in claims, the Ministry of Justice has announced that the Civil Liability Bill will be put to the House of Lords, with the hope that it will receive Royal Assent and become an Act (i.e. will become law).
The selling point to the general public is that the savings by the insurers will be passed on to the policyholders, with a “potential” of saving £35 a year.
This sounds great! £35 could go towards other important bills. However what many people are unaware of is the effect this will have on people who make a claim for personal injury as a result of a road traffic accident.

Compensation for Injuries

The law entitles a person to seek compensation for pain, suffering and loss of amenity. The idea is that the injured person is put back into the position they were in before the accident occurred. Obviously a Defendant cannot physically remove the pain and suffering that someone experiences, so the Court does the next best thing – awards you compensation for that pain and suffering.
Compensation is often awarded for two things – compensation for the injury and compensation for your financial losses. The usual myth is that compensation is hundreds or thousands of pounds, like the compensation that can be awarded in America. Unfortunately that is simply not the case here. In fact, the claims that settle for large sums are usually made up of past and future loss of earnings, the cost of care and other financial losses, rather than compensation for injuries.
Compensation is modest, but still reasonable given the impact and
inconvenience an injury can have on a person.

How is personal injury compensation calculated?

A judge would usually consider guidelines (known as the Judicial College Guidelines) to identify a bracket for the type of injury. They then consider all the factors such as, duration of symptoms, severity, affect on day to day life and so forth. Then the judge may consider similar cases to come to a conclusion.
This process, in my view, is fair because no two injuries are the same so I do not think a set figure for each injury is appropriate.
By way of example, imagine two people who both suffer whiplash. They recover from their symptoms within 6 months. The first person has severe symptoms for 2 months and then 4 months of minor nuisance pain. The second person has 5 months of severe pain and 1 month of minor pain. Clearly the second person has suffered more, despite recovering within the same time as the first person; they should be awarded different sums of compensation accordingly.
However, the Civil Liability Bill intends to change that for people who sustain whiplash.
The government, following insurer recommendations, have proposed a fixed tariff that “fits all” depending on the injury duration, not really taking other factors into consideration.
An example of the comparison is below:-
tariff
Where a judge would likely award two different figures between £2,050 and £3,630 (depending on all of the relevant factors explained above), the fixed tariff would award £450.
It seems highly unfair that both people above be awarded the same figure.

What does the fixed tariff mean with regard to instructing a solicitor?

Currently, if your compensation for injury is less than £1,000, then your claim is a “small claims track” claim and you cannot recover your legal costs from the Defendant if you are successful. Theoretically, in that situation, you would be personally responsible for your solicitor’s fees. It is therefore not sensible, costs wise, to instruct a solicitor for a claim in the small claims track where the cost of the solicitor outweighs the compensation sought.
At the moment, the two people in the above example would be able to recover their legal costs (solicitor’s fees etc.) and could justify instructing a solicitor. Under the fixed tariff system, they won’t be able to justify the cost. This means that you would be without legal representation against an insurance company, who would likely have more experience and knowledge than you on how to win a claim – which, for the insurers, means they don’t have to pay you any compensation at all.
To make matters worse, the government are considering increasing the small claims limit for personal injury claims from £1,000 to £5,000. A person who suffered a whiplash injury for two years would be forced to litigate against an insurance company alone, being unable to recover their legal costs from the Defendant. It is generally accepted that insurance companies do not want to pay out if they do not have to, and that is how they make their money.
People who have suffered injuries from legitimate personal injury claims should be entitled to legal representation, and to have the costs of that representation paid for by the Defendant, if their case is successful.
Unfortunately, if the reforms above take place, and you cannot afford legal advice from an experienced personal injury solicitor, the prospects of your case being successful, or of you receiving all the compensation you deserve, are very slim indeed.
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