Friday, 24 February 2017

Whiplash Muddle

The government has swiftly considered the responses to its consultation on reforming the claims process for whiplash injuries. Indeed it has drafted legislation, including provision for a tariff system of compensation that throws up some bizarre anomalies.

The small claims limit for all road traffic injury claims, including but not exclusive to whiplash injuries, will be increased to £5,000. All other PI claims up to £2,000 will be dealt with as small claims. So, a claimant will be able to recover costs of legal representation for a claim for a knee injury for which damages are £3,000 only if it was suffered otherwise than in a road traffic accident.

For whiplash injuries (the definition of "whiplash" yet to be published) and psychological injuries (suffered on the same occasion as a whiplash injury), Judges are no longer to be trusted to assess the level of compensation. Instead the government will impose a tariff of damages.

Tariff for whiplash and psychological injuries set out in the Government's Response to the Consultation on reforming the Whiplash claims process.

Injury Duration
2015 average payment for
PSLA – uplifted to take account
of JCG uplift (industry data)

Judicial College Guideline (JCG) amounts (13th edition)
Published September 2015
New Tariff
0-3 months
A few hundred pounds to £2050
4-6 months
£2,050 to £3,630
7-9 months
£2050 to £3630
10-12 months
£2050 to £3630
13-15 months
£3,630 to £6,600
16-18 months
£3,630 to £6,600
19-24 months
£3,630 to £6,600

The new tariffs are therefore the same whether the injury is a physical whiplash injury alone or a whiplash injury with psychological injury, and however long the psychological injury lasted (the tariff is set by the duration of the whiplash injury).

This throws up some interesting anomalies:

  • The new tariff is set at 13% of the existing average award for 0-3 months injuries and 83% of the existing average for 19-24 months injuries. 
  • There are increasing marginal tariff awards for each additional 3 months of injury are: £225, £315, £425, £630, £840 and £1065. In fact the severity of symptoms tends to be at its highest in the initial period, tailing off. Thus the marginal tariffs should diminish.
  • An additional month of injury from 15 to 16 months results in £840 in additional damages - more than for a full nine months of injury.
  • The tariff awards proportionately more
  • The severity of symptoms is irrelevant to the tariff. So a very severe injury that fully resolves in 6 months attracts an award less than a minor injury lasting 9 months.
  • Unless the regulations carefully define psychological injury, someone who suffered disabling PTSD for the rest of their life would be restricted to the tariff if they suffered a 20 month whiplash injury at the same time. 
Nailing my own colours to the mast, I would have raised the small claims limit for all PI to either £2,500 or £3,000 and left the courts to determine damages for all injuries, to whatever part of the anatomy and however caused.

Having gone down the route of introducing a tariff for certain injuries suffered in certain circumstances, the government was likely to get itself in a terrible muddle. And so it is proving.

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