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Personal injury claims

What is a personal injury claim?

A personal injury is a legal term to describe physical or mental harm to your person, as opposed to your property.

People may claim compensation if they are injured as a result of an accident which was not their fault – this is referred to as a personal injury claim. 

The most common types of personal injury claims are for:

The Civil Liability Bill

Fixing a broken system to help millions of motorists

The Civil Liability Bill is Government legislation at reducing the cost of motor insurance by modernising the personal injury compensation system in England and Wales.

People and businesses are paying more for their motor insurance than ever before and we need changes to the law to tackle some of the root causes. Soft tissue injury claims have been rising in recent years as cold calling claims firms have thrived, driving up the cost of insurance.

This Bill will ensure people in England and Wales receive fair compensation while reducing excess costs in the system. In a competitive market such cost benefits get passed through to customers, as they did after previous reforms in 2013 when average motor premiums fell by £50 over the next two years. Following the announcement of the Bill leaders of 26 insurance companies representing the majority of the UK motor and liability market wrote to the Government committing to passing cost benefits on to customers.

The reforms will:

  • Provide a tariff of payments for some aspects of whiplash compensation.
  • Simplify the claims system so legal advice is only paid for on road traffic personal injury claims over £5,000 (rather than £1,000).
  • Introduce a ban on seeking or offering to settle whiplash claims without medical evidence of the injury.
  • Reform how the Discount Rate used to calculate larger personal injury awards is set, to ensure it is up to date and reflects how claimants typically invest their compensation.

Six things you need to know about motor insurance costs:

  • Personal injury costs add more than a third to the cost of insurance - These claims are the biggest contributor towards costs and, at nearly 37% on average, are nearly double the next most significant factor (overheads) at 19%.
  • Personal injuryClaims are rising - Latest data shows that since 2005 motor personal injury claims are around 40% higher while road accidents have fallen by nearly 30%.
  • Cold calling claims cowboys are driving up costs - There are more than 750 personal injury claims management companies in the UK, turning over nearly £200 million a year. Since April 2017 the Claims Management Regulator has cancelled 69 licences, reflecting some of the poor practice in the sector.
  • We are an international outlier when it comes to the calculation of long-term personal injury awards - At minus 0.75% we have a personal injury Discount Rate that is the lowest (and therefore the most costly) of any major economy in the world. Whiplash style claims are much more common in the UK than in other major economies. 
  • The average motor premium paid rose by 9% in 2017 to a record high, adding an extra £40 to the average motor insurance policy.

  • Insurers have a good track record of passing on cost savings - The industry passed on savings under reforms introduced in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), which saw premiums fall by £50 on average over the next two years.

  • When will these changes come in?

    The Bill has two parts. The first part is aimed at whiplash claims and introduces a new tariff for compensation payments. This will be introduced, along with the increase in the small claims limit, in April 2019.

    The second part relates to reforming the setting of the Discount Rate and will be implemented as soon as the Bill receives Royal Assent.

  • Will insurance premiums fall as result of these reforms?

    Insurance is a very competitive market, with each insurer setting their own premiums, but clearly any moves to reduce cost pressures can benefit customers. Twenty-six leading insurers have committed to the Government to pass on to customers the cost benefits from these reforms.

  • Is there a danger that some people will be under-compensated?

    No. 

    For larger claims covered by the Discount Rate claimants must still receive 100% compensation to meet their expected future needs, and this will be at a significantly more generous rate than it was between 1999 and 2017.

    Under measures to increase the small claims limit, claimants will still receive fair compensation and be able to claim all medical expenses and loss of earnings as they can now. And claimants will be still be able to claim for other ‘special damages’ such as hire of an alternative vehicle.

  • Will I be able to be legally represented if my claim goes through the small claims court?

    You will still be able to seek legal representation, but you will be responsible for paying your legal costs. There is guidance available to help you pursue a claim without legal representation.