Supreme Court: The PI market waits
Whiplash claimants, insurers and their lawyers will be watching the Supreme Court closely tomorrow when it hears the appeal on how to value so-called mixed injury claims.
The Association of British Insurers (ABI) is representing the interests of the defendants in Hassam & Anor v Rabot & Anor, while both the Association of Personal Injury Lawyers and Motor Accidents Solicitors Society are intervening to support claimants.
The case, which has many thousands more awaiting the outcome, centres around how a court should value claims in the Official Injury Claim (OIC) portal where there is both a whiplash injury subject to the OIC tariff and other injuries which are not. Around two-thirds of cases in the portal are mixed claims.
The majority in the Court of Appeal backed valuing both injuries separately in accordance with whatever scheme or tariff applied, and then reducing the total for any element of overlap of the non-tariff element with that already compensated for within the tariff for pain, suffering and loss of amenity (PSLA).
The defendants argued that all PSLA common to (i.e. concurrently caused by) both the tariff and non-tariff injuries should be treated as fully compensated for by the tariff award. This meant only a further small amount would be appropriate for any additional PSLA, if any could be exclusively attributed to the other injuries as being solely caused by them.
Dissenting, the Master of the Rolls, Sir Geoffrey Vos MR said the wording of the Civil Liability Act 2018 “leads inexorably to the conclusion” that the defendants’ position was the correct one “as a matter of statutory construction”.
In a report on mixed injuries published ahead of the hearing, the Association of Consumer Support Organisations (ACSO) – which supports the claimant position – said that, since the Court of Appeal decision, defendant law firms have looked to challenge non-tariff injuries on the basis of causation and the mechanics of the accident.
“Challenging how specific injuries occurred but not disputing the tariff injuries results in the claim remaining on the OIC portal,” it said. “One impact is that claimants without representation may then struggle to comprehend the significance of an allegation or how properly to address it.”
ACSO noted how many claimant law firms had exited the market since the OIC was launched in 2021 and said the Supreme Court ruling “could see this number decrease even further, given that supporting consumers in whiplash-only cases may not be commercially viable”.
“Should the Supreme Court agree with the MR’s dissent, insurers will increase their savings as a result of the reforms, and these could potentially be passed onto consumers.
“However, given that mixed-injury claims were not considered by the Ministry of Justice in its impact assessment ahead of the passage of the Act, it is likely that any additional savings will increase profitability for insurers.
“Should the Court of Appeal’s decision be accepted, insurers may continue to push for further reforms, such as further increasing the small claims track limit and including non-whiplash injuries under a revised tariff, noting that this would require primary legislation, or even abolishing general damages altogether, as was first proposed in 2015.”
The ACSO report noted how the number of motor personal injury claims has fallen from a pre-pandemic 653,983 in 2019 to an all-time low of 352,230 in 2023 as a result of the OIC.
The proportion of settled claims involving mixed injuries has, according to the ABI, risen from 27% in 2016 to 39% in 2023.
“Such an increase is likely to be because, before the tariff, the whiplash injury constituted the vast proportion of the claim; claiming for other minor injuries was not likely to make a material difference to its overall value.
“The tariff, in reducing dramatically the value of the whiplash injury, led to more claims being made for other, non-tariff injuries sustained.”
However, ACSO said that data it has collected from three anonymous medical reporting organisations (MROs) countered the claim of defendants that the OIC has turned consumers in England and Wales into “a nation of weak ankles, knees and toes”.
One of the MROs, which collected specific data on non-whiplash injuries prior to the introduction of the tariff, recorded an 8.3% increase in the average number of non-whiplash injuries reported per medical report from 1.56 in 2019 to 1.69 in 2023.
Matthew Maxwell Scott, ACSO’s executive director, said: “Although all MROs point to a small increase in the number of injuries per claim of between 8% and 16%, this is to be expected due to the decreased value of whiplash-only claims.
“This increase is also in a market which has roughly halved in size, and so represents a much smaller overall number of claims.
“Additionally, difficulty in legal funding for low-value whiplash-only claims has almost certainly dissuaded many consumers from pursuing these, particularly without legal representation.”
Writing on the ABI website, Mark Shepherd, its assistant director, head of general insurance, said: “Essentially, we’re increasingly moving from being the country that had the weakest necks in Europe to the weakest knees in Europe which, if those driving these claims get their way, risk eroding any benefit from the reforms.
“In all of this debate, it is vital that the compensation paid for road traffic collision injuries is proportionate to the level of pain and suffering endured…
“The Court of Appeal judgment has the effect of bringing injury values back close to pre-whiplash reform levels. It’s also likely to continue to drive up the number of claims involving additional minor physical injuries, and risks pushing more claims over the £5,000 damages threshold for legal costs.
“This significantly reduces the intended costs benefits of the whiplash reform package, and does not help to reduce pressure on motor premiums.”
Also looking ahead of the ruling, Andrew Wild, head of legal practice at the law firm First4InjuryClaims, commented: “Claimants were promised simpler, swifter access to justice when the whiplash reforms were launched nearly three years ago and instead have been faced with uncertainty and delays.
“This has led to a huge and concerning backlog of cases, with the average time taken to settle a case in the Official Injury Claim portal now almost 300 days.
“The Court of Appeal’s decision may not have been popular with insurers, but it provided clear, sensible and much-needed guidance, which I hope the Supreme Court will uphold, and urgently, so that vulnerable claimants and the lawyers they continue to need are not left in limbo for any longer than necessary.”
Ian Davies, a defendant specialist at Kennedys, said: “My expectation is that the Supreme Court will endorse the Court of Appeal’s decision. This approach gives district judges sufficient leeway to deal with claims on a case by case basis.
“It also endorses the Court of Appeal’s 2011 decision in Sadler v Filipiak, which established the ‘step back’ method of allowing the judge to make any necessary adjustment to the total figure for multiple injuries so as to avoid over-compensation.
“Whatever happens, however, it will not be the end of litigation around the OIC as there are other areas of the rules that will need to be tested in the courts.”
A thoughtful, balanced article on the mixed injury issue. The ‘weakest necks in Europe’ is straight out of the Conservative Government playbook used at the time the CLA was debated, and at that time it was shown by Ken Oliphant (prof of Tort Law at Bath University) to be a good one-liner but a false one liner. Now the ABI is trying it on again, for mixed injuries, but just as before, it hasn’t addressed the evidence, which paints rather a different picture. Meanwhile motor premiums are at historic highs, and there seems little sign of the promised £35 being handed back to consumers.