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Court of Appeal rules on valuing whiplash reforms mixed injury claims


The Court of Appeal has today handed down judgment in the test cases of Rabot v Hassam and Briggs v Laditan endorsing the valuation methodology set out in the first instance decisions of DJ Hennessy at Birkenhead County Court.

Although the Master of the Rolls dissented, the Court of Appeal confirmed the following approach:

  1. Assess the tariff using the statutory regulations.
  2. Assess the award for the non-tariff injuries applying existing common law principles.
  3. Step back and apply a Sadler adjustment taking into account that the amount of compensation included in the tariff award for the whiplash component is unknown, but is smaller than it would be if the compensation for the whiplash element had been assessed applying common law principles.

Permission to appeal was refused.

There is one difference from the Sadler approach which was affirmed by Lady Justice Nicola Davies that the final amount of compensation cannot be less than what would have been awarded for the non-tariff injuries if only these injuries had been suffered by the claimant.

What does this mean for compensators servicing low value motor injury claims on digital handling platforms?

The position is now clearer in terms of how to approach valuing these injury claims profiles and there is a now authority which binds the lower courts.

However, the real question is to how and to what extent the judgment will influence offers, negotiation and settlements in the pre-litigated handling.

We expect delayed medicals, particularly from the secondary market routes and damages-based funding to be released for settlement, but whether this results in an operational surge or a steady uptick is debateable and only time will tell. Open claimant offers may be withdrawn and reset prolonging settlement times and in the short to medium term, while waiting for the market to settle, we are likely to see an uptick in quantum dispute small claims track litigation. Compensators should review existing offer calibration tools, but should not make any significant adjustments yet and continue to use existing relationships with claimant representatives to leverage bulk settlements on ‘sticky claims’ not compromised in the negotiation process.

The effect of the judgment will be increasing injury severity in the low value motor injury claims space driven by the frequency of mixed injury tariff plus claims with consequential damages inflation. The ‘race’ to the £5,000 small claims track limit is on for the secondary market. Solutions to counter this for compensators will include accelerating their data-based know your opponent capability applying different settlement models for different claimant representatives and strategic causation challenges to change behaviours. Prevention is better than cure; compensators should revisit their existing bodily injury third party capture, and intervention processes to identify and enhance opportunities for capture to control and govern injury triaging. The application and scope any pre-medical and early offer process should be rebooted accounting for the regulatory ban for a whiplash injury.

So what will be the overall impact of the judgment on the intended objectives of the whiplash reforms? We may see a scenario where the average cost of a post-reform whiplash claim will be similar to the same cost of a pre-reform claim. However, there may still be an overall positive indemnity spend accrual accounting for irrecoverable legal costs and a permanent drop in frequency of claims submissions.

Today’s judgment cements the compensation inflation of tariff plus injury claims profiles as an unintended consequence of the whiplash reforms. There is unlikely to be the political will to make a statutory amendment to the wording of the legislation to deal with the dissenting interpretation of the Master of the Rolls. Whether in time the debate changes course examining the possibility of a tariff-based approach for minor injuries remains unclear, but it will not be any time soon. In the meantime, compensators need to remain agile and fluid deploying their data analytical capabilities against individual claimant representatives to leverage as much benefit as possible in the settlement.

Mark Hall

Mark Hall
Director of Strategy - Motor Personal Injury


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