A judgment from the Court of Appeal could hamper the government’s attempts to maintain downward pressure on the cost of motor injuries in the UK, global law firm Clyde & Co has warned.
Eighteen months after the government introduced reforms to legislation around whiplash claims and other soft tissue injuries, the Court was asked to provide guidance on mixed injury claims – those involving both whiplash and non-whiplash injuries, with one of them falling under the Whiplash Injury Regulations 2021.
Last week, the Court of Appeal issued a judgment on the test cases of Rabbot v Hassam and Briggs v Laditan, the first two cases on mixed injury claims.
The Court’s majority ruling, avidly awaited by the insurance and legal sectors, was that the award for non-tariff injuries should be assessed using common law principles rather than with any kind of set costs.
According to Clyde & Co, this effectively incentivises personal injury claimants to continue bringing claims for de minimis or trivial injuries to other ‘additional’ areas of the body.
Prior to the whiplash reforms, the firm explained, claimants would have been unlikely to advance these injury claims.
However, now that clarity has been given by the Court of the degree of consolidation of general damages awards for minor injuries caused by both whiplash and other injuries, this increases the chance that claims will breach the £5,000 limit of the government’s new RTA Small Claims Protocol.
“Simply put, non-tariff injuries such as arm and knee injuries have become more valuable,” said Mark Hemsted, a Clyde & Co partner. “This judgment creates the risk that the movement towards using additional injuries to bring claims will increase value and frequency to the extent that it will thwart the primary intention to reduce claim value.”
He added: “Despite Parliament legislating for fixed sums of compensation for whiplash injuries – and minor psychological injuries – lasting up to two years, one imagines that a whiplash injury with a prognosis period of 15 months coupled with a similar prognosis for minor non-tariff injuries is now likely to bring such a claim out of scope.
“If more claims fall out of scope, insurers should consider whether to anticipate prognosis creep, a higher degree of claims with multiple medical reports and ultimately claims incubation.”