The Government’s whiplash reforms came into force on 31st May 2021. We outline below how they will affect you and provide the key information that you will need in order to make an informed decision going forward regarding motor legal protection.
The aim of the reforms is to lessen the amount of fraudulent and inflated whiplash claims. They are believed to have contributed significantly to motor premiums over a number of years. Should the anticipated reduction in claims costs occur, the Government is insistent that insurers must provide these savings to the public in the form of lower insurance premiums.
Children, protected parties and accidents in the workplace are excluded from the new rules. The reforms only apply to ‘adults’ injured as a result of a road traffic accident on or after 31st May 2021 in England and Wales. The measures introduce set amounts for whiplash claims and increase the financial limit of claims managed through the current ‘small claims track’ (formerly known as the small claims court) from £1,000 to £5,000.
For the vast majority of whiplash claims, both the compensation amounts that injured parties at set to receive and the costs awarded to solicitors who pursue the claim on their behalf, will be substantially lower. As a result, law firms are having to restructure the way that they charge in exchange for their services.
Working in conjunction with the Motor Insurance Bureau (MIB) the Government has created the ’Official Injury Claim’ platform. This online solution aims to ease the impact on innocent claimants. It will enable them to submit and negotiate their whiplash compensation claims directly with the third party’s insurance company. Some readers may be familiar with the concept as it is comparable to how the PPI compensation claim process worked.
The new whiplash compensation tariffs are set out in the table below.
New Compensation Tariffs
| Injury Duration (Months) | Tariff Amount (Whiplash Alone) | Tariff Amount (Whiplash and Minor Psychological Injury) |
|---|---|---|
| 0-3 | £240 | £260 |
| 4-6 | £495 | £520 |
| 7-9 | £840 | £895 |
| 10-12 | £1,320 | £1,390 |
| 13-15 | £2,040 | £2,125 |
| 16-18 | £3,005 | £3,100 |
| 19-24 | £4,215 | £4,345 |
How will this impact Plan’s motor insurance customers?
Unlike other brokers, at Plan we have always provided motor legal expenses as a free benefit of using our services. Due to the reforms we will unfortunately no longer be able to absorb this greatly increased cost. However, our motor legal supplier have agreed to manage small claims, on our customer’s behalf, via a very competitively priced before the event Motor Legal Expenses Insurance policy at just £15.
The policy will give you access to expert advice and provide up to £100,000 in legal expenses cover if you are involved in an accident that is not your fault and you need to pursue an injury compensation claim against a third party insurer. You will be able to purchase this policy at the point of renewal or when you’re incepting a new motor policy with Plan. If you suffer the misfortune of being involved in a claim but opted not to purchase Motor Legal Expenses Insurance our recommended supplier will still offer to seek the damages on your behalf but you will instead need to agree at the outset of proceedings that they are entitled to retain 25% of the subsequent settlement. There is also the option of submitting, processing and negotiating any claim by yourself.
An additional benefit of the motor expenses insurance that we offer is that it provides cover for all your un-insured motor related losses from a non-fault accident. Should you have need, this would include the pursuit your motor insurance excess, damage to your property in the accident and also assistance with claiming from councils for tyre and wheel damage caused by pothole damage.
What’s the Process Going Forward?
From the 31st May 2021, any customer involved in an incident should still call Plan’s 24/7 motor claims helpline on 0333 003 061. Our claims team will offer advice and support whilst taking details of the incident before notifying all relevant parties.
If you believe that you have been injured and intend to pursue a compensation claim against the third party, the claims handler will then establish how to proceed. The process will largely be determined by whether there is a Motor Legal Expense policy in place before the event occurs. The following 3 options will exist and the merits of each will be clearly explained:
- If before the event you have taken out a Motor Legal Expenses Insurance policy then you will be provided with the services of a law firm. They will assess the case for the potential of being successful before proceeding with a claim against the third party insurer. They would pursue the claim using the portal and their costs will be insured by your Motor Legal Expenses Insurance policy.
- If you do not have a before the event Motor Legal Expenses Insurance policy, you can be recommended the services of a law firm, who will assess the prospects of success. They may then pursue a claim against the at-fault party, via the portal, but on a Damages Based Agreement (DBA) at a cost of 25% of the damages recovered.
- Alternatively if you do not have before the event Motor Legal Expenses Insurance policy you can also independently pursue a claim with the third party insurer directly via the ‘Official Injury Claim’ portal. This will involve submitting, processing and negotiating any claim settlement without expert legal assistance. However you will retain 100% of any damages awarded.
We are providing this information now so that you have time to consider your options in advance of speaking to our account handlers. We also hope that that this information helps to manage your expectations should you be involved in a future claim having previously benefitted from our free motor legal cover. If you select to purchase the new Motor Legal Expenses insurance your documentation will be issued accordingly and it will resemble the policy schedule that we currently issue.
Customers Wishing to Utilise The ’Official Injury Claim’ Platform
As a customer if you wish to proceed with pursuing a compensation claim via the portal without expert legal representation, then it’s important to know how the process will work. There are 5 stages to pursuing a claim through the portal:
- Submitting the claim
- Selecting a medical provider
- Reviewing the medical report
- Receiving an offer
- Accepting an offer
It is still very early in the roll out process but early information regarding the interface indicates that ID and validation checks will take place followed by requests for details of the incident and injuries sustained. You will then need to obtain medical reports to evidence the claim and submit them for review by the third party insurer.
Liaising with third party insurers on the portal has been likened potentially to a “lottery” in terms of the quality and promptness of the service they may provide. There will be a need to manage the insurer throughout the process, as well to assess the impartiality and accuracy of the advice they offer. The demands of this procedure may vary greatly from provider to provider. So, it is important to know that you retain the right to acquire independent legal guidance at any point.
Our Advice
We hope that we have made you fully aware of the details regarding the new Whiplash Reform and its potential effect. The full impact on those wishing to make valid whiplash claims is yet to be seen. Likewise, the user-ability of the portal and fairness of the offers received via it remain unknown at this point.
However, we believe that at £15 our before the event Motor Legal Expenses Insurance policy represents strong value. It should ensure that from 31st May 2021 onwards our customers promptly receive any compensation amount due to them in full following a convenient claims process.