New Changes for Those Injured in Road Traffic Accidents

Monday 31 May 2021 marks the date when two significant changes come into force regarding compensation for those unfortunate to be injured in a road traffic accident. The first of these relates to the contribution which the defendant or, more usually, their insurers have to pay towards the injured person’s legal costs, and the second relates to how the compensation is calculated for what are commonly described as whiplash injuries.

At the present time, the claim for the injuries has to be worth in excess of £1,000 for the insurers to have to contribute towards the injured person’s legal costs. For the vast majority of cases, that figure will rise to £5,000, a fivefold increase. The bad news does not stop there, because at the same time, a tariff system is being introduced to determine the value of such claims, and this will lead to a significant reduction in the levels of compensation recovered. At the bottom end of the tariff system is a fixed figure of £240 for those people who suffer a whiplash injury, which takes up to three months to settle. Under the current system for valuing injuries, the same person would be entitled to receive up to £2,300, this therefore represents a reduction of almost 90%. For a whiplash claim to be worth more than £5,000 under the new system, the symptoms would have to last for more than two years.

And the Good News?

The practical effect of this on those injured is that it will be uneconomical to instruct a solicitor to deal with the claim in the way they would now, so they will have to deal with it themselves, or make a significant contribution to their legal costs. The only good news is that it only applies to accidents on or after 31 May 2021.

An online portal has been designed, which is meant to assist people to pursue their own claims and a guide of no fewer than 64 pages has been issued. I have been doing this type of work for almost 20 years. I have watched several webinars about the changes as well as attending a full day course last week and I think that I have just about got my head around it all. I think it is completely unrealistic to expect people to deal with these claims on their own.

You might wonder what the justification is for such significant changes and I have been told there are two. The first is to reduce fraudulent claims and the second is to reduce insurance premiums. I have not seen anything within the changes, which will reduce fraud; in fact I heard one barrister explain recently that it will actually make it harder for insurers to fight fraudulent claims. This is because if they allege that the claim is fraudulent but such an allegation is not proved, the injured person would be able to recover the cost of instructing a solicitor and the insurers would also incur their own legal costs. It would therefore be cheaper for insurers to simply settle such claims.

Will I Save on My Insurance?

As to whether it will reduce insurance premiums, I would not recommend holding your breath on that. According to data published by the government, during 2020, due to COVID, the number of personal injury claims following road traffic accidents fell by 47% compared with 2019, yet over the same period, car insurance premiums fell by just 1%. The reforms are based on a promise by insurers to pass on to customers any savings made, but based on these figures, I just cannot see that happening. It is about time that insurers admitted that rising car insurance premiums have very little to do with personal injury claims and the government started thinking about the rights of those who have been injured by someone else’s negligence. The absurdity of the reforms are best explained by asking the following question:

How can it be right that someone who suffers a three month whiplash injury following a road traffic accident receives £240 and has to deal with the claim themselves, yet someone who suffers the exactly the same injury, following, for example, a fall at work, receives up to £2,300 and the assistance of a solicitor? Answers on a postcard please!

For more information please contact our specialist personal injury team.