Summary
In our second podcast of the ‘Let’s talk Motor’ series, Principal Associates Glyn Thompson and Rachel Houghton look at what the reforms were intended to achieve and discuss whether they met their objectives.
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Transcript
Rachel Houghton: Hi, everyone, welcome to Weightmans next episode of the Let's talk Motor podcast series.
My name is Rachel Houghton. I'm a Principal Associate here at Weightmans in the motor team. I'm joined by my co-presenter, Glyn Thompson, who's also a Principal Associate. Hi, Glyn.
Glyn Thompson: Hi, Rach.
Rachel Houghton: Glyn and I talk today about the review of the Whiplash Reforms. We're two years on now from the introduction of the Whiplash Reforms back on the 31 May 2023. Glyn, who joins me, is head of the motor sector focus group at FOIL, and he's the only defendant lawyer representative on the MOJ's OIC Advisory Group. That group, of course, is chiefly there to ensure that the portal does what it's intended to do. So thanks very much for joining me today, Glyn. So let's take a recap then. What are the whiplash Reforms?
Glyn Thompson: Well, good question. Whiplash Reforms are lots of different things, and you you know you could, you could make quite a long list, but I think chiefly they do three things. Firstly, we all know that they introduce a tyre for valuing whiplash injuries used to be JC Guidelines, you know, taken from the table much lower awards. Secondly the Reforms make changes to what is and what isn't a small claims track matter. We all historically know, don't we, that a small claims track don't get any costs used to have to be that your injury is worth less than £1,000.
Well, that's changed. The adult vehicle occupants, you and I driving our cars to and from work. Our injuries now have to be worth £5,000 to be considered fast track. And then the third major change really is that there has been a new Portal introduced, Of course, the OIC Portal, and that's for me and you. That's for these adult vehicle occupants who are affected by the small claims track limit. Change basically allows us to issue our injury claims ourselves, you know.
Rachel Houghton: Yeah. And why would they have been brought in them?
Glyn Thompson: Well, it was predominantly a political decision about lowering insurance costs. You know we talk about the cost of living crisis today, but if you cast your mind back about 7 or 8 years you'll recall that motor insurance was kind of the premium costs were going through the roof a little bit. Really, you know my own policy went from, let's say, a few 100 pounds over a thousand, and the government considered that was to do with claim culture and whiplash culture. So they wanted to reduce the number and the cost of injury claims, really, right across the industry.
Rachel Houghton: Yeah, and what were the Reforms designed to result in then in real terms? What’s supposed to have happened?
Glyn Thompson: Well, I think the thing they wanted to happen chiefly is that they wanted people to decide not to claim. You know, it's a tricky one that because the government has always said not legitimately injured people we don't want them to not claim, but there was a sense that people who were claiming who perhaps weren't as injured as they were saying, you know, that can range from genuine fraudsters to perhaps those maybe slightly exaggerating and malingering, to just perhaps people who are just swept up in the claims culture that existed at the time, maybe being persuaded to pursue an injury claim when otherwise they might not felt as though it warranted that kind of thing.
So that was the first thing. And the second thing was probably to give people less damages. Part of the same idea of dampening down claim culture, give people less damages. And then the third thing, of course, was an attempt to remove solicitors from the kind of bulk of claims, hence that increase in the small claims track limit.
Rachel Hughton: Yeah, and so far then, do you think they've set out to achieve that then? Do you think they've achieved what they wanted to?
Glyn Thompson: I think to some extent, you got to say yes to that question. We know accurately without debate that in the three years prior to the Reforms, there are about 660,000 motor injury claims registered with the CRU that was fairly consistent for three years. We now know that it's 380,000 so we now know that there are 60% of the claims that they used to be. So frequency is definitely down, there's no two ways about that..
Damages we know that the most common injury was historically whiplash. We know that the tariff is in place. We know that the tariff gives much lower awards for whiplash. It just must follow that it is also achieved its objective of, you know, dampening down damages towards people recovering less damages.
Rachel Houghton: But of course, it's not just whiplash is it, so there's all the other injuries or the mixed tariff injuries as they are now called?
Glyn Thompson: No. That's right. We've only got the one tariff, of course, whiplash, but people will suffer any number of injuries in a road traffic accident. Always have always will. I think we now call them mixed injury cases, you know, It's difficult with mixed injury cases to know what the picture was before. You know, the CRU collected some data, but not much.
And there was no consistently collected data on who just suffered whiplash and who suffered whiplash plus something else and mixed injury. But from the minute they start collecting data post-Reform we know that only about 30% of claims were whiplash only.
So the rest, at that kind of snapshot in time at the beginning of the Reforms were injury cases, you know.
Rachel Houghton: So hasn't that increased now though? Aren't the more mixed injury cases now?
Glyn Thompson: I think people think there's a perception that there's more mixed injury cases but I'm not really sure that that's borne out by the data. And, you know, there was an initial creep away from whiplash injuries. You know, the OIC is being collecting data for two full years now quarter on quarter. Initially 31.5% of claims, injury claims pursued were whiplash only. And that seemed to be decreasing by about a percentage point a quarter.
And it looked like, you know, we're going through 30 going into 29 and forecasters, me included were saying, “I can see a position whereby the number of people claiming whiplash only gets really right down towards 20” so that actually more and more people are pursuing mixed injury cases, but it just hasn't happened actually.
The last quarter data which we've got available end in March this year showed that people suffering just whiplash only.
Is still above 30% - 30.4%, well, it was 31.5%, two years ago. So whiplash only and mixed injury are staying proportionately where they always were it seems.
Rachel Houghton: Which is quite surprising because, of course, you would get more in damages if you've got mixed injuries, wouldn't you have than pure whiplash?
Glyn Thompson: That's right. And that's right isn't it? That's naturally the case if you suffer more injuries, you get more.
Rachel Houghton: Pre and post Reforms
Glyn Thompson: Yeah. That's right. And it's right, and it should be that way.
I think with mixed injuries in mind, it's fair to say that certain elements of these Reforms have happened as predicted, you know, there are reduced claim numbers as predicted, reduced damages.
But I think the thing that was most difficult to forecast and it's almost inevitably the greatest source of discussion and friction and frustration and possibly litigation is kind of this idea of mixed injuries and what you should give as an award when someone suffers a non-whiplash alongside a whiplash. That's the real problem you know.
Rachel Houghton: And of course the Court of Appeal in theory have sorted that out have they now? They've made a decision, I think, in a couple of cases back in January.
Glyn Thompson: Yeah, they did. Yeah. You know, that's the big news isn't it? Case wise over the last couple of years with these Reforms. And in one sense, they offered a very simple formula, you know, you value the non-whiplash injury on its own, you add it to the tariff allowance and you stand back in discount for the overlap.
But it's not that simple in real terms if anyone trying to apply that simple formula will tell you. You know, if anyone is suffering a sore elbow and whiplash, how do you value that elbow in isolation?
You know, part of any injury, let's stick with this example of an elbow, is part of any award is related to what you can't do, what loss of amenity you've suffered, what restrictions you've got. Yeah. How do you assess that in isolation when somebody has another injury, a whiplash injury, how do you attribute, you know, loss of a amenity to one injury and not both? It’s a problem and you know, it's something which the industry is being grappling with really over the last couple of years.
Rachel Houghton: Yeah and obviously, we've got this Court of Appeal decision but what do you think the answer is then? How are we going to sort that out?
Glyn Thompson: I don't think anyone thinks the Court of Appeal judgment sorted it out on its own. What we do know is that that's being appealed again isn't it to the Supreme Court. So the brilliant thing I suppose in this space is that the conversation is ongoing, the debate is ongoing, and it's ongoing at the very highest level that the legal system can offer. So you would hope wouldn't you that you will get even more clarity and even better answers. Listen, there are lots of pathways this Appeal can take. There are lots of issues in the Appeal judgment, which the Supreme Court could be asked to focus on. For me, the most useful question it could deal with and could offer some assistance with is how do you assess the value of an injury if you focus on loss of amenity and restriction of, over and above paying for a second, how do you assess that when it's suffered alongside whiplash? That would really be useful because it’s no secret that's somehow splitting, you know, the attribution of loss of amenity between injuries or allowing half of whole JC Guideline allowance when you value an injury.
It's just never formed part of what we've ever done when we value an injury. So it needs thinking about really, I think.
Rachel Houghton: Yeah it does. And what do you think now then? So right now in in the files on the ground? What's happening now?
Glyn Thompson: Well, we've got some data because as I say, OIC has been collecting data over the last two years. So we can kind of see what's being allowed for non-tariff injuries relative to whiplash. And people may hear horror stories of allowances for non-tariff injuries, you know, the elbow in my example, but the data tells us that agreements or awards are running at an average of about £900 to £950. So they're not massive sums we're talking about here.
Rachel Houghton: And that's not that bad is it really? You'd think, well, based on sometimes some things you hear that it will be a lot more than that.
Glyn Thompson: It's probably more than insurers thought they were going to pay for non-tariff awards prior to the Reforms because everyone had in mind that tariff was essentially going be the chief element of the award, but it's not so high as to cause terrible anxiety whilst we await the Supreme Court decision.
Frustratingly, it's actually more than just being allowed for whiplash, you know, the data tells us the average is about £720. So the other thing to say about what’s happening in the meantime whilst we await the Supreme Court judgment is that Judges, this is somewhat anecdotal this, this is about, you know, feedback from Barristers and those who we interact with, but Judges seem to understand that the JC Guidelines isn't the best way on its own in isolation to evaluate these relatively minor other injuries. You know, the JC guidelines says maybe £2,500 for a three month injury. But Judges seem to understand that if someone bangs their elbow on the interior of a car and it might be bruised for up to three months that perhaps it isn't a true three month injury. So what I suppose we get about is that fairness seems to be kind of sorting itself out in local Courts whilst we're, you know, we wait to see what the Supreme Court has to say, I think.
Rachel Houghton: Which is really good to know, isn't it? Really good to know.
Glyn Thompson: Yeah.
Rachel Houghton: And final question for me, Glyn is, as a former claimant lawyer myself as well, we talked earlier on about the fact that one of the aims of the Whiplash Reforms, in theory, was for claimants to deal with cases themselves and possibly solicitors exit the market.
That hasn't happened, has it? That the solicitors are in the motor claims industry still massively, aren't they? So why do you think that is?
Glyn Thompson: I think I know that I think they are, I think that's fair to say isn't it, you know, they didn't leave on mass, some left, but they didn't leave on mass the day after the Reforms came in.
You know, we know that there are about 380,000-390,000 claims registered with CRU each year.
We know that about, you know, 295, maybe so three quarters of all claims go through the OIC portal and about 90% of those are pursued by solicitors.
So the number pursuing some claims without solicitors is quite small, 7%-8%. And what did the government envisage though? think it probably envisaged in the impact assessment, you'll see envisaged about a 1/3 of all OIC claims being pursued without solicitors.
It's imposed on to today's figures, that'd be a 100,000 a quarter of all things. It's not happening. It's not happening in the way that it was expected.
Why is that well, everyone will have a view. In my view that's not been informed or greatly advertised to the public, there's no television radio campaigns.
So the day after they launched, you know, you would still try to pursue a claim in the way you always did, which was probably historically in contact with solicitor.
That kind of maintenance of the status quo just almost dampened and prevented the idea of claimants in person taking off.
But for me, I think I've been getting to slowly change. And I I think it will change a little bit more in the coming kind of months and years.
These are only very small percentage figures, but 9% of users of the OIC portal were still claimants in person. Slightly creeping up, it’s 10.5%.
I think people realised that they can pursue claims themselves it isn't that difficult and the OIC portal is there for them, and it comes with an enormous amount of support. And, actually, if they do it that way, they get to keep the damages.
Rachel Houghton: Oh, yeah. Of course. Yeah.
Glyn Thompson: As we go with these tough times, that'll probably be a driving factor. You know, the word spreads as well, doesn't it across society? These things are capable of being done by you on your own, so have a go. I think.
Rachel Houghton: Yeah. So what do you think then is next in this space? We've had two years of it so far. What do you think is coming up next in this area?
Glyn Thompson: Well, I think the last couple of years, I've seen lots of kind of technical changes for the users of the OIC portal. There's been one or two tweaks to the rules here and there. But I think it's fairly settled now. I think the government must look at this and think this has been okay.
We've done alright with this.
Rachel Houghton: Yeah. I agree.
Glyn Thompson: There's no two ways about it. The Supreme Court judgment is the next big ticket thing, what it has to say on mixed injury cases.
So that could kind of lead to some changes. But until then, it's just business as usual. I think the only other thing on the immediate horizon is that in October this year, insurers have got to report to the government on the savings that these Reforms have led to. And not only that, but how they're being passed on to insurance policy purchases, you know, the customers of theirs. And now they have to lay it out how much money is being saved as a consequence of these Reforms.
And perhaps even how much money hasn't been saved, it'd be interesting to see what reaction those reporting's, you know, obligation could lead to. It depends upon how much you've saving is being passed to the public. So that'll be an interesting kind of point in the journey to resolve the […].
Rachel Houghton: Definitely. Yeah. Definitely. Yep. Thanks very much, Glyn. Some really interesting thoughts on the Reforms so far, two years on.
Let's see what's in store then for the next two years. Thanks very much. Thanks to all the listeners.
And do look out for the next Let's talk Motor podcast in the series. Many thanks.