Whiplash: Maximum tariff figure still just below small claims limit
A large number of insurers thought the government was going to increase the whiplash tariff by more than it did, it has emerged.
Despite compensators having called for no increase in response to the Ministry of Justice’s (MoJ) call for evidence on the tariff, half of those who took part in a poll run by leading defendant firm Kennedys said they had been expecting more than the 14-15% rise announced last month.
Partner Ian Davies, who led the webinar during which viewers voted, said he had expected a bigger increase, “so in one sense some good news for compensators there”. A quarter of voters said the rise was what they expected and the other quarter thought it would be less.
Mr Davies said he had anticipated the MoJ following the example of the Judicial College Guidelines, which earlier this year were uprated according to the retail prices index. However, the MoJ – in line with general government policy – chose the lower consumer prices index.
He added too that the increase meant the maximum tariff figure (for a whiplash injury lasting 18-24 months, plus a minor psychological injury) was still £25 below the small claims limit of £5,000.
This was a “very conscious” decision, he suggested, with Kennedys’ “sources and contacts in the judiciary and the MoJ” indicating there was “zero appetite” to increase the limit.
It is as yet unclear when the tariff increase will be implemented – next April or May was thought most likely – and most viewers expected it only to apply to new cases from then, rather than retrospectively.
Chris Stubbs, head of Kennedys’ investigations team, said it was “unrealistic” to think that claimant firms would delay progressing claims until then for what, in an average case, would amount to an extra £40 or so, because of the impact on their cash flow.
Insurers would only start actually paying out the higher sums about a year after it was introduced, he added, but Mr Stubbs also forecast that more cases would exit the Official Injury Claim (OIC) portal and go to the MoJ portal for cases worth between £5,001 and £25,000.
Meanwhile, one of the few claimant law firms still active in OIC claims has criticised insurer behaviour and claims tactics.
Shirley Woolham, chief executive of Minster Law, said: “There are some glaring inconsistencies in the way third-party insurers are engaging with the portal. Whilst instrumental in shaping the rules and protocols that guide the platform’s use, ironically some of these insurers are failing to stick to the very rules they helped create.”
Minster’s data identified which insurers were meeting the requirement to provide a liability decision within 30 business days of receiving a claim, and which were more likely to question causation.
“As a business, we have to test ourselves that these challenges are genuinely about legitimate legal disputes and not about creating unnecessary barriers that slow down and frustrate the claims process and then use this insight to inform our approach to managing and progressing claims.”
Ms Woolham set out recently how Minster Law has completed a three-year transformation so that it could handle whiplash claims profitably.
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