17th November 2020
Government’s proposed tariff of damages are “fundamentally flawed, arbitrary and wholly unjust”
The Motor Accident Solicitors Society (MASS) is urgently calling for a fundamental review of the Government’s proposed tariff of damages following a submission to the Lord Chief Justice ahead of the planned implementation of the ‘whiplash’ reforms in April 2021. First published in May 2018 during the passage of the Civil Liability Act, we believe that the tariff of damages for whiplash injuries sustained by motor accident victims needs significant revision to better reflect judicial awards based upon pain and suffering.
MASS contends that the published tariff of damages has been:
- Based upon inaccurate and incomplete insurance industry data
- Nominally based on old figures from late 2013
- Produced with little or no transparency about how they were calculated
- Developed as a set of judgements to fit the insurance industry’s agenda of saving money, rather than objectively calculated using an evidence-based formula
- Designed to be unfairly low given the possible severity of the injury(s) sustained
- Set unjustifiably low compared with other non-injury financial awards
- Configured to unfairly discriminate between categories of individual suffering the same injury or level of pain
- Created to, in effect, increase the small claims limit to £7,000.
Commenting on the tariff of damages, Paul Nicholls, Chair of MASS, said:
“As one of the most important aspects of the Government’s reforms, the tariff of damages for future motor accident victims has been developed without any transparency and in cahoots with the insurance industry.
They remain fundamentally flawed, arbitrary, and wholly unjust, having been contrived without any objectivity, logic or scrutiny and with little or no consideration of their devastating impact upon accident victims.
They are ridiculously low compared to the awards currently recommended by the courts and will cause considerable distress in the future for those unfortunate enough to sustain a road traffic accident whiplash injury after their introduction.
When genuinely injured people realise the true impact of the reforms, they will rightly feel deeply aggrieved that their injuries, pain and suffering have been dismissed as insignificant by the government.
MASS is urgently calling for the figures to be thoroughly and independently reviewed and the final figures uplifted to better reflect current awards.”
The courts have been assessing damages for accident victims since the creation of the law of tort in the 11th Century. Since 1992, ‘Guidelines for the Assessment for General Damages in Personal Injuries’ for use by the courts have been published annually by the Judicial College. A proposed tariff of damages was first included in a draft Order (The Whiplash Injury Regulations) in May 2018 to correspond with the Second Reading debate of the Civil Liability Act in the House of Lords. Throughout the passage of the Civil Liability Act 2018, MASS argued that the power to determine damages should continue to reside with a judicial body.
Since the Civil Liability Act 2018, the number of road traffic accident (RTA) personal injury (PI) claims has fallen from a peak of around 830,000 in 2011/12, with around 540,000 of these described as being for “whiplash injuries”, to around 650,000 for the pre-pandemic year to March 2020, a downward trend that has been present for nearly a decade.
A flawed methodology
1. Based upon inaccurate and incomplete insurance industry data
Derived from Claims Outcome Advisor and Colossus, two valuation software tools used by some insurers, based on insurer only settlements, as opposed to the value of claims at court, and so necessarily under-value claims. The same flaw to data would apply to any settlement figures provided by claimant law firms, which is why we have called for an independent audit of the proposed figures.
2. Nominally based on old figures
The proposed tariff is also nominally based with reference to the 12th Edition (December 2013) version of the Judicial College Guidelines. Even if they have been, and there is little comparison between the tariff figures and the guidelines, they are supposedly based on data that is seven years old and have not been reassessed according to the last published version, the 15th Edition, from November 2019.
3. Little or no transparency in how the proposed damages have been calculated
The tariff has been developed in secrecy, by unknown parties, but suspected to be based on an original insurance proposal. It appears to implement a percentage reduction from the damages currently awarded, but without any independent audit of the figures, it remains very difficult to understand the logic of the proposed calculations. Despite repeated attempts by MASS through both correspondence and Freedom of Information (FOI) requests to determine the precise methodology used to determine the proposed tariffs, all answers have been deliberately vague and at times outright evasive, leading us to believe that the proposed damages are arbitrary and without logic.
4. More likely to be a set of judgements rather than evidence-based
We strongly suspect that the proposed damages are not based upon any judicial determination of damages, but are, in the perhaps unguarded words of the former Minister, Lord Keen, a “judgment” that “is not based on some mathematical formula or percentage”:
“With respect, a judgment had been made having regard to all the information available as to what level should be set for the tariff to address the very problem that we are attempting to deal with. It is not based on some mathematical formula or percentage.” (Lord Keen of Elie, former Advocate-General for Scotland, Committee 1st Day, Civil Liability Bill, 10 May 2018)
5. Designed to be unfairly low given the possible severity of the injury or injuries sustained
The proposed damages are significantly lower than those set out in the Judicial College Guidelines, which consider the full range of individual circumstances of the injured person along with the impact particular to them, e.g. the full range of suffering being both length and severity of symptoms along with impact on ability to work, hobbies and lifestyle.
Capturing claims up to a value of £7,000 – the current value of a claim at the top of the two-year injury tariff, they will reduce the amount awarded to accident victims from between 90% to 47%:
|Duration of Injury||Tariff Amounts||Potential Award – 2019||Reduction|
6. Set unjustifiably low compared with other non-injury financial awards
The tariff figures should justly reflect pain and suffering, over possibly many months, but the proposed damages will be reduced to a level where an individual who suffers pain for several months will receive less than an airline passenger delayed for a few hours (a long distance flight that lands four hours late attracts a £530 compensation), holiday sickness lasting a few days to a week (£1,250-3,300) and less than someone who suffers poor service from a law firm (£250-750), more than the actual injury claim. It is neither just or equitable that a victim of a guilty party receives less from that guilty party, who has paid for insurance against the risk and in respect of which policy the insurer makes a profit, than anyone who “suffers” and receives compensation for one of the reasons set out above.
7. Configured to unfairly discriminate between categories of individual suffering the same injury or level of pain
A person who suffers pain for 12 months from whiplash injury sustained in a road accident will receive roughly £1200 in compensation, but a person who suffers the same injury through a different type of accident will receive £4000. A neck injury resulting from a criminal action is considerably higher than the proposed damages for RTA claims with a potential award paid by the state of four-times that paid by the responsible insurer. The proposed tariff produces an inherent unfairness by discriminating between categories of individual suffering the same injury or level of pain.
8. Created to in effect increase the small claims limit to £7,000
According to the original Consultation, the policy objective was to capture whiplash claims with a value of up to £4350, within the proposed increase of the small claim limit to £5,000. In reality, however, the increase in the motor small claims injury limit will capture claims with a current value of £7000, significantly above the proposed £5000 small claims limit.
The combined effect of the tariff (reducing the value of a two-year injury from £7000 to £3750) and the increase in the small claims limit (from £1000 to £5000, bringing a two-year injury within the limit), means that together the reforms capture cases currently worth £7000. The scope of this change is far greater than envisaged or ever considered by Parliament.
Injuries at this level generally involve several medical consultations, extensive treatment, and pain that lasts for 2 years. The unintended consequence of the reforms is that these individuals, whose claims cannot be considered “low-value”, will be caught by the reforms and left without legal assistance.
Notes for Editors
The Motor Accident Solicitors Society (MASS) is the primary organisation representing road traffic accident solicitors acting for the victims of motor accidents. We represent around 100 solicitor firm Members throughout the UK, representing approximately 2,000 claims handlers, who handle an estimated 400,000 PI motor accident claims annually on behalf of the victims of those accidents.