Mixed results for compensators as the Lord Chancellor announces her review of the Whiplash Regulations

Following a consultation process the Lord Chancellor has now announced the result of her review. The Regulations in question relate to claims for injury brought under the Pre-Action Protocol for Personal Injury Claims below the Small Claims Limit in Road Traffic Accidents.  These are claims valued at less than £5,000 and brought via OIC.  The following decisions are of note.

Revision of the injury tariff

The current structure for calculating fixed damages is a duration band system setting fixed damages which increase by a fixed amount for every three months of injury up to a maximum of two years.  The duration bands are further split between whiplash injuries and whiplash injuries with a minor psychological component.  The Lord Chancellor has decided to maintain the existing duration band tariff structure.

However, the Lord Chancellor will increase the tariff amounts to account for CPI inflation since 2021.  A three year  inflationary buffer has also been built into the increased figures to protect claimants from further inflationary rises between now and 2027.  This will cause a 14-15% increase in each injury band.

A comparison of the current and revised rates can be seen below:

It is notable the revision of the fixed damage rates brings the award for longest duration injury perilously close to £5,000.  As a result there is a risk that an even greater number of claimants will fall into the camp of those whose claims have a value over £5000 (as they have sustained a whiplash injury of the longer durations together with a non-tariff injury which is valued using the traditional common law method as per Hassam v Rabot).  When claims for injury estimated to be worth more than £5,000 are brought it is in a separate Ministry of Justice process which is costs bearing, this will inevitably lead to increased indemnity spend for compensators.

Minor psychological injuries

The tariff is split between two sets of figures, one for whiplash injuries only and one for whiplash injuries with an additional minor psychological injury.

There have been considerable difficulties in respect of determining what is and what isn’t a minor psychological injury and there has been an increasing use of secondary medical reports to assess the psychological injuries with the subsequent argument that the compensation for the same is outside of the tariff award. 

Here the review provides valuable clarification for all parties.  The Lord Chancellor adopts the approach set out in the Judicial College Guidelines which defines a minor psychological injury as one that resolves within three months.  The Guidelines also assert that an injury such as travel anxiety can still be considered minor even if it lasts longer than three months.

Therefore, the review considers that a specialist report on psychological injury should only be obtained if the claimant has sustained a more significant injury or PTSD. 

This is positive news for compensators, given that it gives more clarity on the definition of minor psychological injury and should curtail the use of secondary expert medical evidence when a minor injury has been diagnosed in the initial medical report.

Expert Evidence

The Lord Chancellor has declined to make any adjustment in respect of the medical reporting definitions in her review.