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Drivers to save £35 as new whiplash rules take effect

Written by: Emma Lunn
Motorists across England and Wales will save up to £35 a year on their insurance premiums due to changes to whiplash rules which aim to put an end to fraudulent injury claims.

The reforms came into effect yesterday (31 May) and will result in combined savings of more than £1bn for motorists.

The changes are designed to reduce the high number of whiplash claims made each year, with more than 550,000 in 2019/20 alone. Insurers have pledged to pass on the savings these reforms will create to drivers – worth a total of £1.2bn.

From today, drivers can use a new digital portal to make a claim for any road traffic related personal injury valued at less than £5,000, including claims for whiplash. This means claimants can settle their claim without the use of a lawyer if they wish. It is anticipated that the majority of road traffic accident claims will use the portal in future.

The small claims track limit for road traffic accident-related (RTA) personal injury claims has been increased from £1,000 to £5,000. Therefore, the majority of all RTA-related claims will now proceed through the cheaper small claims track where legal costs are not recoverable. In most cases this will spare motorists court appearances, fees and legal costs.

A new fixed tariff of compensation for whiplash injuries sets out how much can be claimed for an injury, depending on how long it impacted the claimant. The government says the tariff will give claimants “clarity, predictability, and certainty” about how much their claim will be worth, while ensuring costs are controlled and that compensation is proportionate to the injury suffered.

Despite fewer road crashes being reported year-on-year since 2013, road traffic accident claims are more than 40% higher than in 2006. This has been fuelled by a reported increase in exaggerated and often disproportionate claims, driving up the costs of insurance premiums for ordinary motorists.

Robert Buckland QC, the lord chancellor, said: “For too long the system for making whiplash claims has been open to abuse by individuals looking for an easy payday – with ordinary motorists paying the price.

“Our changes, which come into force today, will put an end to this greedy opportunism and ultimately see savings put back into the pockets of the country’s drivers.”

Dominic Clayden, chief executive of Motor Insurers’ Bureau (MIB), said: “We are pleased to have delivered on our remit to build a service that meets the requirements of these important policy changes.

“MIB’s focus has always been about making sure the new legal process is as easy and straight forward as possible for anyone who might need to make a claim. To make sure the service works well for everyone we will continue our work with the Ministry of Justice to listen to feedback and to make further enhancements.”

The reforms are part of measures contained in part 1 of the Civil Liability Act 2018.

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