Recent insights have revealed that many insurers anticipated a more significant adjustment in the whiplash tariff than what was recently announced by the government.
In a poll conducted by prominent defendant law firm Kennedys, it was discovered that half of the respondents anticipated an increase greater than the 14-15% rise declared last month. Ian Davies, a partner at Kennedys who hosted the webinar where this poll took place, mentioned his expectation for a more substantial increase, noting this as somewhat positive news for compensators. A quarter of surveyed participants felt the rise was as expected, while the remainder predicted it would be lower.
Davies highlighted that he anticipated the Ministry of Justice (MoJ) to mirror the Judicial College Guidelines, which earlier followed the retail prices index. However, the MoJ opted for a lower increment based on the consumer prices index, aligning with the broader government policy. Importantly, this increase leaves the maximum tariff figure, applicable to a whiplash injury lasting 18-24 months combined with a minor psychological injury, just £25 below the small claims limit of £5,000—a deliberate decision, suggested Davies, informed by insights from judicial and MoJ contacts indicating a lack of support to raise this limit.
The timeline for implementing this increase remains uncertain, with expectations set for either April or May of the coming year. It is predicted that this will apply only to forthcoming cases rather than existing claims. Chris Stubbs, heading Kennedys’ investigations team, pointed out the impracticality for claimant firms to delay claims advancement until the increase, given the small additional payout, which would impact cash flow.
Stubbs also noted that the increased tariff would likely elevate the number of cases moving away from the Official Injury Claim (OIC) portal to the MoJ portal, which handles claims up to £25,000. Concurrently, one of the few claimant firms active in OIC claims, Minster Law, has voiced concerns regarding insurer conduct and tactics.
Shirley Woolham, Minster Law’s chief executive, has criticised certain insurers for their inconsistency with the operational rules of the OIC portal—ironically, rules they played a significant role in developing. Minster Law’s data highlighted that only two of the twenty insurers were adhering to the stipulation of providing a liability decision within 30 business days. Woolham expressed the necessity for firms to discern if these challenges reflect genuine legal disputes or are mere obstacles designed to delay and disrupt the claims process.
The recent government decision has left insurers adjusting their expectations regarding the whiplash tariff. While some view the increase as moderate, others expected a more substantial rise. The situation continues to evolve, with various impacts on claims processes and insurer strategies becoming apparent.
