Civil Liability Bill update

The Civil Liability Bill has been proposed to address primarily whiplash claims and the personal injury discount rate.

The Government is concerned about the continuing high number and cost of road traffic accident whiplash-related claims, many of which they state are minor, exaggerated or fraudulent and the impact these claims have on motorists through increased motor insurance premiums. The Government is of the view that the amount of compensation currently paid to claimants for these claims is out of all proportion to the level of injury suffered.

The Civil Liability Bill’s policy objectives and intended effects are to disincentivise minor, exaggerated and fraudulent cases so as to tackle the continuing high number and cost of claims. Following implementation, the Government states that claimants will continue to receive a proportionate amount of compensation which will be supported by a requirement to obtain good quality medical evidence from an accredited expert.

Based on the available evidence, the Government has proposed that the following reforms best meet the policy objectives:

1. Introducing a fixed tariff system for damages for pain, suffering and loss of amenity (PSLA) for injuries with a duration of up to 24 months for road traffic whiplash related claims.
2. Raising the small claims limit to £2,000 (from £1,000) for all injury claims and to £5,000 for road traffic accident claims.
3. Requiring medical reports to be produced for every road traffic accident whiplash related claim.

The Civil Liability Bill was introduced into the House of Lords on 20 March 2018 and entered the House of Commons on 28 June 2018. At the recent second reading of the Civil liability Bill in the House of Commons on 4 September 2018, ministers further debated the government’s proposals to reform whiplash injury claims. David Gauke, The Lord Chancellor and Secretary of State for Justice at the second reading highlighted that “The Bill will make important changes to our personal injury compensation system, which it aims to make fairer, more certain and more sustainable for claimants, defendants, the taxpayer and motorists.”

He stood by the Government’s proposal to raise the small claims limit for road traffic accident injury claims to £5,000 which will mean that 85-90% of whiplash claims will in future be managed through the small claims track with claimants unable to recover the cost of any legal assistance which they might require.

Taken together, the Government claims the whiplash measures proposed could result in savings of around of £1.1 billion a year.

During the debate, the Lord Chancellor conceded that he was aware that there had been concern about the inclusion of vulnerable road users – for example, cyclists, pedestrians and motorcyclists – in the proposed small claims track rise. He confirmed these vulnerable road users were to be removed from the small claims limit changes.

Mr Gauke also stated that amendments to the Bill would be made to ensure that the insurance companies are robustly held to account regarding the savings made and how they are passed on to consumers. There would also be measures in the Bill to introduce a ban on settling whiplash claims without face to face medical examinations and medical evidence, which will discourage fraud and incentivise insurers to investigate claims and provide reassurance to claimants that they are being compensated for the true extent of their injuries.

The Lord Chancellor said that the high number of whiplash claims and compensation levels justify the new fixed tariff which the Bill proposed to fix sums awarded for compensation for pain, suffering and loss of amenity in whiplash claims. However he assured parliament that there will be important flexibilities on how the tariff operates to make sure that it remains fair and adaptable where necessary to exceptional circumstances, inflation and changes in the claims market.

With regards to the timing, the Government has decided to push back implementation by a year to April 2020. This is said to be to enable careful user testing of the IT system to ensure that the system works well for all types of users on full implementation.

Despite the government’s concession on the exclusion of vulnerable road users and holding insurance companies to account for passing on savings, there still remains widespread opposition to the proposals as there are still concerns about access to justice for claimants and whether the reforms are disproportionate to the problem of combating fraudulent claims which only make up 0.25 % of whiplash injury cases.

It will soon be seen what will transpire at the third reading and whether any further concessions will be made to make the Bill more palatable for those opposing. It is hoped that the needs of injured claimants will be of the utmost concern and they will fare well.