Sponsor segment – Whiplash reforms and traffic accident claims

Thursday 22 July 2021

The rules have changed for what must happen following road traffic accidents in the UK that cause personal injury.

Whiplash Reforms are new rules that apply to all motor accidents involving vehicles registered in the UK where the accident occurred in England and Wales on or after Monday 31 May 2021. Specifically, the Reforms pertain to claimants who have suffered a low-value personal injury as a result of a road traffic collision.

Under the Reforms, solicitors cannot claim costs for whiplash claims below £5,000 in value, so claimants are encouraged to pursue their claims directly.

The compensation award structure has been replaced with a new tariff for whiplash injuries with a recovery of up to two years. This means a zero to three month whiplash injury previously worth £2,000–£2,500 is now worth only £240.

While this is good news for insurers, it comes with challenges. Insurers are now required to make a liability decision within 30 working days of the incident being reported to them.

This may sound like an improvement compared to the 15 days required in the road traffic accident portal, however a failure to respond to liability within this timeframe results in an automatic admission of liability. It is binding and no extensions will be available.

Any decision other than a full admission of liability must be accompanied by the defendant’s version of events in a statement of truth signed by the driver. The claimant can issue proceedings in the absence of a full admission and the case will then proceed to a liability-only hearing, so it is vital insurers receive this evidence within the 30-day investigation period.

An elevated role for risk managers

The Reforms put the onus on risk managers to verify that policies and procedures for driver behaviours are up-to-date, and to advise drivers to report accidents as soon as possible. This helps ensure all information is gathered for disclosure to the insurer in time, which prevents default admissions of liability from impacting the insurance programme.

Risk managers must ensure drivers understand what needs to happen following a road traffic accident. First, the driver must obtain as much information as possible at the scene.

Essential details include how many vehicles were involved, how many passengers were in each vehicle, and if passengers were wearing seatbelts at the time of the accident. If any passenger appeared to be injured in the incident, how serious did the injury appear to be? The driver should indicate whether police and/or an ambulance were called to the scene and if the ambulance took injured people to hospital.

The next step is to report the incident to the insurer as soon as possible. The driver should be prepared to write, sign and submit their version of events and statement of truth, understanding that providing a false statement of truth is considered a contempt of court, with significant consequences.

If the insurer needs to ask further questions about the incident, the driver must cooperate fully. Any failure to assist could lead to a default admission of liability and payment of a claim where the driver may not have been responsible.

Ask your insurer for further guidance on the impact of the new Whiplash Reforms.

Alison Manley (amanley2@travelers.com) is a Claim Relationship Manager at Travelers Europe.

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