Whiplash Injury Regulations 2021

Lord Ponsonby of Shulbrede Excerpts

Monday 26th April 2021 Grand Committee

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, tackling fraudulent whiplash claims to bring down motorists’ insurance premiums is a welcome step. However, these efforts must not be at the expense of access to justice for genuine claimants. On balance, we in the Labour Party support the intention of the regulations. However, we are concerned that they may lack clarity and there should be proper support for the inevitable rise of litigants in person.

We have heard something of the background to today’s regulations—the first proposal in the 2015 Autumn Statement and plans to introduce fixed tariffs for whiplash claims resulting from road traffic accidents. The Minister has explained that the regulations will increase the financial limit of claims managed though a small claim from £1,000 to £5,000 and introduce a new online portal managed by the Motor Insurers’ Bureau to process claims. The Minister also explained that they will set the maximum damages for whiplash claims, although a court may apply a discretionary 20% uplift in exceptional circumstances. Moreover, children and vulnerable road users such as pedestrians, cyclists and horse-riders are excluded from the new regulations.

The plans have been welcomed by the Association of British Insurers, as it is right that there should be an effort to reduce the cost of whiplash claims to insurers, which is currently about £2 billion. I must say that the contribution of the noble Lord, Lord Bradshaw, given his time on his local police authority, was apposite and went to the heart of the problem that the regulations seek to address.

Like all other noble Lords who have spoken in the debate, I have been contacted by several interested bodies. They have sent in a number of questions, some of which I will run through. I am sure the Minister will be aware of their concerns, but I raise them nevertheless. For example, how will mixed claims, whereby whiplash has been sustained along with other injuries, be dealt with? Secondly, under exactly what circumstances may a judge apply the discretionary 20% uplift?

The noble and learned Lords, Lord Etherton and Lord Thomas, made a point about the new portal. First, we trust that the data can be securely transferred to the new portal, but will there be a proper analysis of the data within it so that a review of the new system can be undertaken from an informed point of view? A further question is how the Government propose to address inconsistency in the application of the regulations.

My final point has been made by pretty much all noble Lords speaking in today’s debate. The Association of British Insurers has raised the concern that there may be an incentive for some people to claim for minor injuries and put them at a higher importance than whiplash injuries. That could limit the effects of the reform and lessen the benefits to honest premium-paying customers through the increase in minor injury claims.

In his introduction, the Minister that said he was open to the possibility of a review. When does he think it would be appropriate to review the new regulations?