11 March 2021

The UK Government has confirmed that the Civil Liability Act 2018, which introduces major whiplash reforms in England and Wales, will come into force from 31 May 2021.

In England and Wales, the total damages for pain, suffering and loss of amenity payable will be limited to £240 for injuries not lasting more than three months. The levels increase incrementally for every additional three months that injuries continue, reaching £4,215 for cases where injuries continue up to twenty-four months. A small fixed amount is added to the tariff to cover ‘minor’ psychological injuries suffered on the same occasion as the whiplash injury.

The legislation allows for an uplift of up to 20% in ‘exceptional circumstances’, where a court may determine that damages should be greater than the tariff allows. In these cases, the court must be satisfied that the whiplash injury is ‘exceptionally severe’ or where circumstances seen as exceptional have increased the pain, suffering and loss of amenity caused by their whiplash injuries.

All RTA claims worth less than £5,000 will drop into the Official Injury Claim portal, which is designed to be accessed by litigants in person, and any legal costs incurred will not be recoverable.

The courts will be active in interpreting what constitutes ‘exceptional circumstances’ for the purposes of the 20% uplift and dealing with other issues raised where higher value injuries overlap with those that fall under the tariffs.

Overall, these reforms have been welcomed by the insurance industry in England and Wales as a much-needed step towards to controlling the cost of whiplash claims.

Unfortunately, in Scotland, no similar tariff-based system or attempts to restrict whiplash claims is imminent. Damages awards for whiplash claims will continue to be determined by the Scottish courts with reference to case law and the Judicial College Guidelines (as they will in England and Wales for claims of a value above £5,000). Claimants are likely to receive significantly higher awards in Scotland than in England for such claims after 31 May 2021.

Whether these reforms will lead to claimant forum shopping to shoehorn claims into the jurisdiction of the Scottish courts remains to be seen. It is a possibility, particularly if the wrongdoer is domiciled in Scotland, or their insurer has a place of business in Scotland. This is an issue which will require to be monitored closely.

The number of litigated personal injury claims being raised in the Scottish courts has risen steadily over the past few years and this pattern is unlikely to change with the introduction of QOCS in Scotland on the horizon. In the absence of any similar tariff-based system for restricting whiplash awards, insurers and their representatives defending claims in Scotland should ensure that their settlement strategies involve a renewed focus on settling pre-litigation under the Compulsory Pre-Action Protocol (CPAP), given that the CPAP generally leads to lower solicitor fees than in litigated claims. This is one tactic to control costs and, in the not so distant future, insurers should seek to utilise the various exceptions to QOCS to their advantage.

Angus Gillies, Associate: agi@bto.co.uk / 0141 221 8012