In April 2021, the United Kingdom witnessed a significant shift in its legal landscape, particularly in the realm of personal injury claims arising from road traffic accidents. This transformation was marked by the introduction of the Whiplash Reform Programme and the Official Injury Claim Service (OIC), which have since had a profound impact on how such claims are processed. This portal was designed to facilitate individuals who had sustained minor injuries as a result of road traffic accidents to pursue compensation without the need for legal assistance.
Current Position of the Law
Prior to the reform, the process of seeking compensation for whiplash injuries, categorised as ‘minor’ or ‘non-minor’, following road traffic accidents was often a complex and lengthy ordeal. Dating back to the years before 2021, individuals who suffered such injuries typically sought legal representation to navigate the legal system and secure compensation from insurers. The sheer volume of these claims and the involvement of legal professionals led to a system perceived as inefficient and costly. The cost of motor insurance premiums in the UK was notably high, partly due to the expenses associated with these claims and the role of legal intermediaries. However, despite the availability of the OIC portal, an astounding 90% of its users are currently represented by legal professionals. This interim report emphasizes the need for the Ministry of Justice (MoJ) and the portal's operator, the Motor Insurers' Bureau (MIB), to embark on comprehensive research.
Reasons for the Whiplash Reform
The whiplash reform programme was introduced with several key objectives in mind. First and foremost, it aimed to simplify and expedite the process of filing compensation claims for whiplash injuries. To achieve this, the Official Injury Claim (OIC) service was established, designed to enable individuals to make claims without the need for legal assistance.
The reform programme also sought to reduce the prevalence of minor personal injury claims, which had been placing upward pressure on motor insurance premiums. Additionally, the reforms were expected to generate substantial cost savings for insurance companies, with the intention of passing these savings on to policyholders through reduced premiums.
Importance and Outcomes of the Whiplash Reform
The implementation of the whiplash reform programme represents a significant shift in the landscape of personal injury law in the UK. Key statistics reveal that since its inception, the OIC service has processed over half a million claims, marking a substantial change in the way compensation claims are handled.
However, concerns have arisen regarding the utilisation of the OIC portal by litigants in person, with fewer than 10% of users proceeding without legal representation. This discrepancy is attributed to a lack of awareness about the portal and low user confidence in navigating the system. To address this, recommendations have been made for the Ministry of Justice (MoJ) and the Motor Insurers' Bureau (MIB) to conduct research aimed at improving awareness and user confidence.
Moreover, technical issues have emerged for professional users of the OIC service, hindering efficiency and potentially delaying settlements. The MoJ has been urged to collaborate with the MIB to resolve these issues urgently.
One of the most pressing concerns is the rising number of unresolved cases in the OIC portal, totalling 349,000, with an average settlement time of 251 days. The Committee has recommended that the MoJ investigates the underlying reasons behind this trend and publishes its findings by the end of the year. Additionally, the impact of the reform on motor insurance premiums has not aligned with expectations, as premiums have continued to rise. Factors such as the cost of living, the pandemic, and the war in Ukraine have been cited as contributing factors.
The assessment of the reform's impact on insurance premiums will be closely scrutinised, with transparency and publication of insurer submissions expected. It is anticipated that these crucial issues will be revisited, alongside other facets of the whiplash reform programme, in 2024. This revisit will coincide with the Supreme Court's anticipated verdict in the case of Hassam v Rabot [2023] EWCA Civ 19, which focuses on the treatment of mixed injury cases—those involving both whiplash and non-whiplash injuries. Overall, the significance of these changes in whiplash law underscores their importance in shaping the landscape of personal injury claims and motor insurance in the United Kingdom.
By Eva Manolova
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