- Considered in Grand Committee
- 2:33 pm
- Moved by
- That the Grand Committee do consider the Whiplash Injury Regulations 2021.Relevant document: 49th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).
- My Lords, I beg to move that the Grand Committee do consider the Whiplash Injury Regulations 2021 and the Civil Liability Act 2018 (Financial Conduct Authority) (Whiplash) Regulations 2021.These draft statutory instruments are key components of the Government’s whiplash reforms. They will simplify the process of settling whiplash claims, provide certainty to claimants as to how much their claim is worth, and benefit society by enabling an average reduction in insurance premiums for ordinary motorists of around £35 per premium. I remind the Grand Committee that the Secondary Legislation Scrutiny Committee has drawn both of these important SIs to the attention of the House.The House had a number of extensive debates on the merits of the Government’s policy underpinning these SIs during the passage of the Civil Liability Act 2018—which I will refer to as “the Act”—so, with the limited time available to us today, my focus will be on the detail of these regulations rather than on rehearsing past policy debates.The measures in Part 1 of the Act change the process for making whiplash claims by defining what constitutes a whiplash injury; introduce a fixed tariff of damages for pain, suffering and loss of amenity, or PSLA; provide for an uplift to be applied to the tariff amount in exceptional circumstances; and ban the practice of seeking or offering to settle a whiplash claim without first seeking appropriate medical evidence. In addition, we are increasing the small claims track limit in respect of road traffic accident-related personal injury claims from £1,000 to £5,000.We had also previously committed to increasing the small claims limit for all other types of personal injury, including employers’ and public liability claims, to £2,000. However, the Lord Chancellor has confirmed today, through a Written Ministerial Statement, which I have repeated, that the Government have listened to the views of Members of this House and others, and have decided both to limit this increase to £1,500 and to defer its implementation until April 2022. I hope the Committee will agree that this is a sensible and pragmatic decision, which will give stakeholders additional time to prepare.The Whiplash Injury Regulations set out a tariff for the amount of damages payable for PSLA for a whiplash injury or injuries of up to two years and any minor psychological injury suffered at the same time. They allow the court to apply an uplift of up to 20% to the tariff amount in exceptional circumstances. Regarding the ban on pre-medical report offers to settle, they specify what constitutes appropriate medical evidence and the experts who may provide it. That will differ depending on whether the injuries include a non-whiplash element.The purpose of the other statutory instrument is to give powers to the Financial Conduct Authority to enable it to monitor and enforce the ban on pre-medical offers to settle.
- The next speaker, the noble Baroness, Lady Primarolo, has withdrawn so I call the noble Lord, Lord Hunt.
- 2:42 pm
- My Lords, I first declare my interests as a partner in the global law firm DAC Beachcroft, and as set out in the register. I support these regulations. The structure of a modest tariff for a modest injury is exactly what was anticipated when what is now the Civil Liability Act was debated in Parliament in 2018. I therefore agree with my noble friend the Minister that the tariff is set at the right level to reflect what these cases are really worth.The Judicial College Guidelines do not tell us what hundreds of thousands of simple, low-value claims settle for outside court. The JCG also do not exercise any form of control. They simply record what other judges previously thought over the years and uprate for inflation. The number can go up but never slip back, as the guidelines themselves admit.I will raise just one further point with the Minister, which I made to his predecessor during the passage of the Bill, about other minor injuries outside the tariff. The value of these other minor injuries is not the subject of any tariff so can he provide an assurance that, where they fall to be assessed alongside the tariff, their value will not suddenly become disproportionate to the main whiplash injury?
- 2:44 pm
- Lord Etherton (CB) [V]The digital portal for whiplash claims will be a completely new portal for small personal injury claims arising from traffic accidents where the pain, suffering and loss of amenity element is under £5,000 and all elements of the claim are less than £10,000. It is specifically designed to enable potential claimants to state their claim and avoid court proceedings without the assistance of legal advice, the idea being that the litigant will simply follow the instructions on the screen. It is likely that very large numbers of claims, running into hundreds of thousands, will be processed through the new whiplash portal.As the Minister said, the 2018 Act provides for the tariff of damages to be reviewed every three years. He indicated that now, after a year, consideration will be given to whether there should be a review more often than every three years. My focus today is not on that review but rather on the absence of any provision for collecting data on the operation of the digital technology so far as the claimant is concerned and a review of how well it is working.The whiplash portal and protocol are not part of the court’s digitisation reform programme but arise out of a government policy initiative. I nevertheless urge the Government, as with court digitisation reforms such as the online civil money claims digital process for small money claims by litigants in person, to provide for litigants to record their satisfaction or otherwise with the procedural technology. This is particularly important in the case of the whiplash portal, not only because the litigant is expected to be able to navigate the new digital technology without legal advice but because the technology has been developed not by HMCTS or the MoJ but by the Motor Insurers’ Bureau.I would, for the same reason, urge the Government to carry out a review of the operation of the new portal within nine months of its commencement, informed by the views expressed by the users of the portal.
- 2:46 pm
- My Lords, I declare my interests as set out in the register. It is a great pleasure to follow the noble and learned Lord, Lord Etherton, and I thank my noble friend Lord Wolfson of Tredegar for setting out the purpose of these regulations so clearly. Indeed, the Minister wrote to noble Lords in February of this year setting out the plans for whiplash reform. I strongly welcome the reform and these regulations.I recognise, of course, that there are genuine whiplash claims, but it is known that there are many “creative” claims. The regulations will help deter them and, it is estimated, will result in savings of approximately £1.2 billion, and of £35 on average on motor insurance premiums, which insurers will pass on.The provision of a tariff for damages payable for pain and suffering and loss of amenity is welcome. It is obviously central to require a minimum of medical evidence and a ban on settlement without medical evidence, and this is indeed provided for in the regulations. It also seems sensible to provide for a discretionary uplift of up to 20% for appropriate exceptional circumstances. The small claims track limit being raised from £1,000 to £5,000 is also very sensible.The Association of British Insurers has mentioned that the reforms are very welcome, but it cautions that the potential for claimants to focus increasingly on additional minor injuries, as my noble friend Lord Hunt pointed out, may result in higher awards than the tariffs for whiplash. I hope that my noble friend will be able to say something about keeping ahead of the fray on these developments, which could dilute the beneficial effects of these very welcome reforms.
- 2:49 pm
- My Lords, I spoke in favour of what is now Section 3 of the Civil Liability Act 2018 when it was before the House three years ago—and I have not changed my mind. It seemed to me that the case for the whiplash injury regulations that we now have was compelling. It was far too easy for claims to be made that would not survive scrutiny if they were to be adjudicated on by a court. They would be accepted by insurers because it was so much cheaper for them simply to pay up. Human nature being what it is, not everyone abides by the rules. There was an abuse here that needed to be dealt with. A decision to proceed in this way was taken then, and what we are concerned with now is the content of these regulations.There is no getting away from the fact that the figures listed in each of the columns in Regulation 2 are quite modest. Indeed, some people have described them as “derisory”. We have them, however, in the columns before us, and I welcome very much the Minister’s assurance that he accepts the Lord Chief Justice’s recommendation that a review in the light of experience be undertaken in relatively early course, after one year’s experience.We note, of course, the opportunity for the court to increase the amounts payable by up to 20% in exceptional cases, and we should also note that Section 3(8) of the Act rightly provides that nothing in that section prevents a court awarding an appropriate amount for any other injuries the person may have sustained, which may well be the case in the ordinary road accident section. There is a risk, of course, that other kinds of minor injury will now take the place of whiplash claims. That will need to be carefully watched. For now, however, modest though the figures are, these regulations have my support.
- 2:51 pm
- Baroness Gardner of Parkes (Con) [V]My Lords, I welcome the introduction of the whiplash injury regulations, given the sheer volume of whiplash claims that were being made to exploit the system, rather than to support those who suffered genuine injury. I do hope that, rather than just being absorbed by the insurance industry, any savings will be passed back to insurance policyholders as a reduction in policy premiums, as they have been paying for many of these unscrupulous claims with increased policy premiums for decades.My concern with the introduction of the official injury claims portal—a move to an online service that is very much the norm these days—is whether this will disfranchise many in society who would otherwise be eligible to make a successful claim. Can the Minister comment on how those who do not have online access or IT skills, as is still all too often the case for much of society, are to make their claims? Is there an alternative, paper version? In addition, can he outline to the House how these changes to claims are going to be advertised or otherwise communicated, together with any paper version availability?
- 2:52 pm
- My Lords, I welcome the reform of whiplash injuries compensation because, in many instances, the accumulated payments for whiplash injuries—which in many instances are very painful and have to be endured for a long time—have imposed a considerable level of premiums on ordinary insurance people.These regulations are supported by the insurance industry, which has long campaigned on the need to tackle the UK’s whiplash epidemic and has provided funding for the full technical development and build of the new portal through the motor insurers’ premium. However, solicitors’ associations have a lukewarm attitude towards the new regulations, contending that the methodology used for formulating the new tariff rates is fundamentally flawed and leads to a substantially greater reduction in damages payable to injured claimants than is justified. They also believe that the proposed tariff of damages is unfairly low, given the possible severity and duration of the injury sustained.Therefore, will the Minister and his colleagues consider publishing the correspondence and exchange of views with the judiciary, in the interests of transparency? There is a view that not all the information from the judiciary has been made available as part of the consultation process. Will he also indicate what steps will be taken to ensure that the tariff rates are increased to facilitate fairer damages to injured claimants? In this instance, I mean people who are deserving of this payment and have had to endure so much pain and suffering.
- 2:55 pm