Guest Blog: 2024, a year in the low value injury world
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Opinion | 14.01.2025 | 4 min read
Guest Blog: 2024, a year in the low value injury world
he start of 2025 is the perfect time to look back on those key developments which occurred in 2024 in the low value injury space and what these mean for claims. 2024 delivered a substantial number of decisions which have altered the landscape: the Supreme Court judgment of Hassam v Rabot; the publication of the latest edition of the Judicial College guidelines and the release of the report reviewing the whiplash regulations. All these developments are likely to result in pushing claims’ cost in the low value space in an upward trajectory.
Hassam v Rabot
A few days before Easter, the Supreme Court handed down their judgment in the matter of Hassam v Rabot. Although the whiplash tariff was legislated for in the Civil Liability Act 2018, and the Whiplash Injury Regulations 2021 were introduced on 31st May 2021, it took almost three more years before the court determined how to value an injury claim which involved both a whiplash injury governed by the whiplash tariff but also a non-whiplash injury. Right from the offset it was highlighted that guidance would be needed, but it was decided this ought to be left for the courts. Fast forward to March 2024 when two-thirds of claims presented included both tariff and non-tariff injuries.
The appellate Judges’ decision was to endorse the approach from the matter of Sadler v Filipiak (the guidance on how to value multiple injuries in common law). The valuation would be concluded by assessing the nature of the injuries; valuing each within their appropriate regime (tariff or common law) and then adding the valuations together. Thereafter the valuer was to stand back, assess whether the figure reached could result in over or under compensation, and if that were the case then an adjustment would be needed to avoid that. The court decision made it clear that the introduction of the whiplash tariff had not done anything to affect the common law, therefore this could be the only approach. Disappointingly for insurers, any suggestion that the tariff provided compensation for pain, suffering and loss of amenity (PSLA) for both the tariff and non-tariff element was put to bed.
The ultimate outcome of Hassam was that the reduction in recoverable sums for whiplash created by the tariff would continue to be masked by the inclusion of non-tariff injuries which had emerged since the reforms.
17th edition of the Judicial College guidelines
Only a few days after Hassam v Rabot, the Judicial College (JC) published their latest edition of the JC Guidelines, outlining their current recommended settlement levels. The publication had adjusted the recommendations in line with inflation up to the end of August 2023. The reflected changes adopted the movement within the retail price index between editions. The outcome in respect of potential awards was a 22% increase in the likely sums achieved.
Statutory review of the whiplash injury regulations 2021
Section 4 of the Civil Liability Act 2018 required a review of the whiplash regulations by 31st May 2024. Whilst this was carried out in time, its conclusions were not laid before Parliament until the end of November. The Lord Chancellor considered the current structure of the whiplash tariff; whether the awards or the percentage uplift for exceptional circumstances needed adjustment, and the requirements around the type of medical evidence needed to prove whiplash.
It was decided that the current structure of two bands with the recoverable sum based on the duration of the whiplash would be retained.
Although the original tariff had been set based on projected inflation for three years (using the consumer price index), a further uplift to reflect actual inflation was considered necessary. The consumer price index was again adopted (as commonly used in government). In addition, a new buffer was built in for the next three-year period. This reflected a total 14-15% increase.
It was decided not to change the 20% uplift for exceptional circumstances, and that there would be no change to the type of medical evidence required.
In addition to the review, due to feedback around problems with the definition of minor psychiatric injuries, the Lord Chancellor confirmed the definition would be clarified. Her initial observation was that, within the JC Guidelines, minor is ‘up to 3 months’ but for travel anxiety could be longer, and therefore a diagnosable psychiatric injury would be required to justify more medical evidence.
The next steps are for the Lord Chancellor to consult with the Lord Chief Justice. This is expected to take place by mid-January 2025.
These three developments are not the only factors which will lead to increased claims cost. Supply chain issues and skill shortages which have come about due to world events such as Brexit, the pandemic and the Ukraine war have all seeped into claims cost.
Throughout 2024 we have had several decisions which will impact on the aims of the whiplash reforms. The reforms were introduced to control claims costs and benefit consumers through reduced premiums. However, the decisions are likely to drive up indemnity spend which is already being affected by multiple outlined factors. The tariff was introduced as part of a package including a pre-medical offer ban, the creation of the Official Injury Claim’ (OIC) portal and increasing the small claims limit. If the year’s developments risk the success of the reforms, then to ensure the objectives are achieved, the package needs to be looked at, particularly where the small claims track limit sits.
Within the tariff review, short consideration was given to the limit, and it was commented that there was logic behind an increase, but it was outside the scope of the review and data was needed. It is therefore clear that if the reforms are to remain in any way relevant, then the impact of the 2024 developments needs to be studied carefully and data retained to demonstrate if, as expected, further claims inflation in the low value space is coming to fruition.
