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A prophecy fulfilled? The unintended consequences of the whiplash reforms


In June 2019 in a pre-pandemic and whiplash reforms world, I wrote about the problems that might be presented by the proposed statutory definition of a whiplash injury and the introduction of a tariff system to compensate for such an injury.

The potential negative effect on claims spend when valuing a minor injury suffered alongside a whiplash injury was highlighted as an unintended consequence of the whiplash reforms, which could undermine the good intentions of the reforms – namely to control and reduce claims costs for whiplash claims.

Although I did not have a crystal ball allowing me to gaze into the future, I suggested that the effect of “tariff plus” injury claims should not be underestimated in controlling compensation and overall claims spend. Indeed, it was suggested that instead of reducing compensation, injury awards involving whiplash associated with a non-whiplash injury might actually increase or at the very best stay about the same.

So now, some fourteen months since the whiplash reforms went live, was this prediction actually correct?

We now have a cluster of first instance court judgments, which have addressed the vexed question of how to value a tariff plus whiplash injury claim. The judicial approach appears to be consistent and involves deciding what each injury is, valuing each injury according to any appropriate scheme or regime, adding these valuations together and then stepping back to exercise judicial discretion and reaching a final figure by making an appropriate reduction. The result of this approach is the awarding of compensation that looks very similar to, if not more than the amounts that would have been awarded in the MOJ portal pre the whiplash reforms.

Compensators are looking to appeal some of these court judgments and the main area of dispute centres on what valuations are to be added together before any deduction is made and, specifically, whether the whiplash tariff should be added in or not. There is also an argument whether minor additional injuries secondary to the whiplash injury should only be valued by the guiding reference of the Judicial College Guidelines. These arguments will no doubt all come out in the wash in good time with the Court of Appeal having the last say on the correct methodology to value tariff plus claims.

However, where do these court judgments leave compensators in the meantime?

Despite the intention of the RTA Small Claims Protocol and the OIC portal being for whiplash claims to be settled swiftly and fairly without going to court, the impact of these court decisions may be that we will see a more aggressive approach from claimant representatives to valuing and settling tariff plus claims at the offer and acceptance stages of the OIC and MOJ portals. It is too early to identify changes in settlement handling models from claimant representatives and we will have to wait until the volume of medical reports disclosed for compromise increases. However, there is no doubt that more aggressive claimant representatives acting under damages-based agreement funding models will push harder for higher valuations of tariff plus claims and will be prepared to increase the frequency of dispute litigation accordingly.

Until compensators are able to analyse claims spend from volume settlement data and the impacting frequency of OIC Portal dispute litigation any significant change to offer strategies for tariff plus injury profiles should be modest, if at all. Compensators should continue to try to negotiate commercial settlements with claimant representatives who are operating on a settlement churn model in the OIC Portal, whilst, at the same time, monitoring closely any structural change in the various claims handling models. Know your opponent strategies should remain at the centre of any change in overall settlement strategies driven by data intelligence and compensators need to be agile to implement any reactive strategic changes as quickly as possible.

In June 2019, I questioned whether the intentions of the whiplash reforms would be realised with reference to the law of unintended consequences. Just over three years later, the answer to this question is becoming clearer, but we are not there yet as the long-term effect on claims spend remains uncertain.

Again, without a crystal ball only time will tell.

Mark Hall

Mark Hall
Director of Strategy - Motor Personal Injury


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