What do the Whiplash claims reforms changes mean?


Authored by NIG

The Whiplash Reform Programme, announced by the Ministry of Justice (MOJ), will come into effect on 31 May 2021. It will change the way low-value personal injury claims are made after motor vehicle incidents, aiming to reduce the amount and the cost of minor, exaggerated or bogus claims, and at the same time reducing insurance premiums for motorists. There will be a new Official Injury Claim portal where individuals can make a claim without needing to be represented by solicitors.

What is changing?

  • There will be a new fixed tariff for whiplash and minor psychological injury – significantly lower (at the lower end) than before.
  • In exceptional circumstances, the tariff figures can rise by 20%, with medical experts asked to comment on this.
  • The Small Claims Track limit rises to £5,000, having previously been £1,000.
  • Infant claims are subject to the tariff, though costs will continue to be dealt with through the existing MOJ portal.
  • The reforms don’t apply to ‘vulnerable road users’, which are pedestrians, cyclists, motorcyclists and mobility scooter riders. These claims will still be valued outside the tariff and subject to fixed costs and submitted in the current MOJ portal.
  • The reforms apply only to injury claims. Claims for vehicle-related damage are divided into protocol vehicle costs (incurred by the claimant) and non-protocol vehicle costs (incurred by insurer or other company).
  • Pre-action protocol for low-value personal injury claims in road-traffic incidents will be restricted to damages of more than £5,000 and overall claims less than £25,000.

What do these changes mean?

The new rules allow insurers 30 working days to make a liability decision. If insurers don’t respond, it will automatically proceed to the offer stage.

Where liability is denied, in part or in full, policyholder’s version of events and a signed Statement of Truth needs to be provided by their insurer. It will be vital insurers liaise early with brokers, the policyholder and driver, to find out the full details of the incident. Brokers will need to provide contact details at the claim registration stage.

Where the insurer denies liability in full, and the claimant wishes to proceed, they will have to issue proceedings regarding liability. If the claimant is successful, then the matter will be brought back into the Small Claims Process.

NIG will be looking to identify and understand changes in claimant behaviour, and adapt to them, so we can develop our claims-handling processes in line with the impact of the reforms.


About NIG

We’ve been experts in commercial insurance for 125 years.

The National Insurance and Guarantee Corporation (NIG) is a broker only insurer; we believe in getting to know both the brokers we work with and their clients’ businesses, building trusted partnerships that last for the long-term. Our highly experienced underwriting team are focused on working with brokers to identify and understand the risks faced by UK enterprises. Together, with our risk control experts and risk management tools we develop solutions to help UK enterprises reduce and mitigate key exposures. We offer a wide range of products with flexibility to create tailored insurance cover and when clients need us, claims are dealt with quickly and fairly through a proactive claims approach.

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We’re investing in new technology to make us even easier to trade with. We’re launching an online risk management resource supported by our in-house Risk Control Team and introduced online claims submissions to speed up the claims process, minimising disruption to clients’ businesses. We are also the only insurer two years running with a five-star rating for both TheHub and Software Houses, in the Insurance Times 2019 and 2020 eTrade survey.

We are dedicated to making UK enterprises more resilient.

NIG is a wholly owned subsidiary of Direct Line Insurance Group plc, providing stability and financial strength. Our policies are underwritten by U K Insurance Limited.

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