What you need to know about the Whiplash Reforms

What you need to know about the Whiplash Reforms

One of the biggest challenges that the insurance industry will face in 2021 is the change to the Civil Procedure Rules concerning whiplash injuries, as legal proceedings and rules changes associated with Whiplash Reforms have been announced, which will come into effect on 31 May 2021.


It has been deemed that over the last few years, motor premium costs have become far too high and whiplash claims have increased. According to the Association of British Insurers (ABI), more than 1,500 whiplash claims are made in the UK every day, costing the insurance industry in excess of £2 billion a year. As a result, the cost of whiplash claims to policyholders amounts to an average of £90 per policy.

Changes under the Whiplash Reforms

The Civil Liability Act 2018, which contained the reforms, set out new measures to significantly reduce whiplash claims to save motorists money on their insurance costs, as well as reduce fraud.

As part of the Whiplash Reforms:

  • A new fixed tariff of damages for pain, suffering and loss of amenity will be introduced
  • The settlement of claims without a medical assessment will be banned
  • The small claims limit, known as Small Claims Track (SCT), will increase from £1k to £5k. This, therefore, means legal advice will only be paid for road traffic personal injuries above £5k, as it is believed small claims below this are simple and straightforward to settle and don’t require solicitors involvement

An official injury claim portal is being introduced to fall in line with the new SCT limit. From 31 May 2021, individuals injured in a road traffic accident looking to make a claim of up to £5k (to a maximum total of £10k for all losses) will be able to use this free service to claim compensation without legal support.

These changes will no doubt impact the way in which road traffic collision claims are dealt with by insurers.

The impact of Covid

Over the last year, we have all adapted to the new way of remote working. This has also resulted in changes to our litigation system. For example, court hearings are being held remotely and this is likely to continue to be the case in the future.

The speed at which cases will be brought to court and the fact that hearings will be carried out remotely will pose many challenges in assessing the credibility of a witness. Likewise, remote medical examinations may pose a threat to being able to successfully identify fraudulent claims.

Effect on the insurance industry

The reforms involve dealing with simple road traffic collisions through different Ministry of Justice Portals, with each having differing protocols, impacting how insurers will need to respond. Only now that the new reforms are being introduced can insurers finalise their approach. The priority will be for them to scrutinise the new rules and related protocols, and be sure that systems, policies, and procedures are thoroughly prepared and tested.

The insurance industry will require brokers and motorists support to ensure only valid injury claims are paid and fraud is kept to a minimum. One crucial aspect of this will be for brokers to obtain policyholders’ version of events and a signed statement of truth to dispute a claim within 30 working days (40 days for the Motor Insurance Bureau).

If this information is not received by insurers within the timescales, the new portal will ‘automatically accept’ the third-party claim. As a result, we cannot stress enough the importance of you reporting any motor incidents immediately on day one, regardless of how minor you deem the incident to be.

If you have any questions, please don’t hesitate to get in touch with us.