Compensation and costs cut for whiplash and lower value claims –


Whiplash reforms reduce amount claim compensation for accident victims

Compensation claims for personal injuries have been in the news in recent weeks following government action likely to see compensation further reduced for most accident victims.

February saw the announcement of the government’s plans to again reform lower value personal injury claims, and whiplash claims especially. The main changes, due to come into effect in October 2018, are:

  1. Compensation for whiplash injuries caused by road accidents will be reduced;
  2. More claims will be designated ‘small claims’, where the injured person can only claim damages, not their legal costs; and
  3. Insurers will be forbidden from offering to settle cases until a proper medical report has been obtained.

The first change that will grab the attention of anyone who has suffered a whiplash injury, is the reduction in damages. To give you some idea, whereas currently typical damages for a whiplash that lasts 4-6 months is around £2,150, after the changes this will fall to £450. For someone with a whiplash injury lasting up to a year the fall will be from about £3,100 down to £1,190.

If you haven’t had a whiplash injury yourself, it might be tempting to think ‘So what?’, or even ‘Good! I don’t want these dodgy whiplash claims bumping up my car insurance’. Certainly there is nothing about a particular amount of money that can be objectively said to be either ‘right’ or ‘wrong’ as compensation for neck pain. £2,150 doesn’t cure a whiplash any better than £450.

However, it is rare to hear people dismissing whiplash as ‘trivial’ who have had whiplash themselves.  Whiplash isn’t just a few days of a sore neck; that sort of injury isn’t worth making a claim over. When people make compensation claims for whiplash it is when they have injuries that last months or years.  Imagine spending day after day, month after month, in pain. Painkillers only take the edge off things. Your symptoms get worse during the day so that by the time you get home from work you can only rest to try to be recovered enough to go to work tomorrow. And you only get better very, very slowly.

Whiplash, on the whole, is a pretty miserable thing to suffer. Currently compensation is valued by a judge by comparing it to other cases that the court has decided, so that two people with similar levels of injury will get broadly similar levels of damages.

No longer. Whiplash has been marked out as different, and in the future will be compensated at a lower rate than all other injuries. If someone suffers a whiplash injury in a forklift accident at work they will get more money than someone who has exactly the same injury on the public road, all in order to save insurance companies some money.

If anything, the second change – moving more claims to the small claims procedure – will be even more damaging to accident victims.

Currently, if the compensation for an injury is over £1,000, the injured person’s claim to the insurer is for both damages and legal fees – the cost of their solicitor representing them. Over the years this has been eroded, with the costs payable by the insurers limited and most claimants now expected to contribute up to 25% of their damages towards their own costs, but broadly the insurers pay towards all the damage done, compensation and costs.

The defendant has caused the problem by breaking the law, and someone has been injured as a result. It is the ‘polluter pays’ principle.

From October 2018, personal injury claims in general that are worth £2,000 or less, and road accident claims worth £5,000 or less, will be deemed ‘small claims’. In small claims the insurers only have to pay damages, not legal costs.

That means that if someone injured in an accident has a small claim, if they use a solicitor they will have to pay all of their solicitor’s fees themselves. If they have suffered a whiplash injury, under the new rules they might only be awarded a few hundred pounds, so will making a claim be worth it?  Many will think not, and many perfectly reasonable claims will now not be made.

The final change is that insurers will not now be allowed to make offers to settle injury claims unless a proper medical report has been obtained.

Why on earth would they make an offer when there is no evidence of an injury, you might think.  Doesn’t that encourage people to make claims that might not be properly vetted?

Quite. But it is a symptom of how insurers, over several years, have been consistently short sighted in pursuit of a quick buck. Insurance companies have actually encouraged claims by offering legal services to their customers when they report accidents, in return for which they received fees or preferential terms from their own solicitors. They have made offers to settle cases immediately upon receipt of claims, without medical evidence, so they can avoid paying for a medical report or any further legal fees, even though in the long term this may encourage people without a valid claim to ‘have a go’.

All of these reforms are said by the government to address a “rampant compensation culture”, although one that appears not to exist in reality. However, it is hard to see how they will do so.

A ‘compensation culture’ would be understood by most to mean people making false compensation claims. Does reducing the amount of compensation available deter fraudsters?  If someone is going to try it on, are they really going to not bother if they can only get £1,190 instead of £3,100?

And solicitors acting for injured people act as a filter, deterring those without good claims from making them. If these changes mean more people won’t recover legal fees and so try to claim by themselves without a solicitor, doesn’t this mean there are likely to be more shaky claims made, not fewer?

Above all, the effect of these reforms is simply to reduce the amount injured people can claim, and to reduce their ability to claim at all. It does nothing to target people making false claims.

If you require legal advice in relation to this article or to a personal injury claim, please contact our Personal Injury team on 01733 882800 or email .


Richard Moon, Senior Solicitor

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This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.