At the end of May 2025, it will be four years since the whiplash reforms took effect in England & Wales. What does this experience tell us? 

• Claims numbers have fallen. The reforms were introduced at the end of May 2021, nearly a year after the pandemic, making baseline comparisons with 2020 somewhat unrealistic. Looking a little further back, at road traffic injury claims notified to the Compensation Recovery Unit, the data shows that road traffic claims made to compensators have reduced by around 50%, compared to levels before the pandemic, to roughly 360,000 cases in 2023/24. And the data published by both the Claims Portal Co and the Official Injury Claim (OIC) service backs up this up, showing monthly numbers of around 30,000 notified claims (across both platforms).
• Numbers of lower-value injury claims are down. Data from Claims Portal Co (via which claims valued at less than £25,000 must be processed) suggests that road traffic injury claims in scope currently fluctuate at around 7,000 per month, compared to up to 40,000 (or more) per month in the pre-pandemic years and before the whiplash reforms and the OIC service. Any like-for like comparison must take account of OIC, which sees, on average, around 23,000 new cases per month (hence the 30,000 figure in the paragraph above).
• Traffic levels are stable. Again, disregarding the period of the pandemic, annual vehicle miles recorded in the last year are broadly similar to those recorded in 2018 and 2019, at around 340 billion (GB).
• As are numbers of accidents. Although the government data on road traffic casualties is not entirely reliable (due to under-reporting and inconsistent recording), published statistics for 2023 report either “little change compared to 2022” or a modest decline at most.

The evidence here is of lower claims numbers since the reforms set against broadly consistent levels of traffic and reported accidents. It does not necessarily follow from this that the reforms have caused the fall in notified claims, even if that may be a plausible assumption. Even so, it is worth recalling in passing that one stated aim of the 2021 reforms – spearheaded by the last government – was to reduce the numbers of fraudulent and speculative low value claims.

Future developments? New regulations and new data

There are two important milestones provided for in the underlying legislation, the Civil Liability Act 2018.

First, that the statutory tariff for compensation - set out in regulations made under Part 1 of the Act - must be reviewed three years after its introduction. This duly took place after May 2024, but the general election delayed publication of the findings and conclusions. The new Lord Chancellor then published her review last autumn and she plans to increase the whiplash compensation tariff for future claims by CPI inflation, as we noted in November. 

What is less clear is when this change will be made. After consulting the judiciary (the Lady Chief Justice), the government will have to introduce new regulations in Parliament, which will need to be debated and passed by both Houses. No regulations have been released as yet, so it is difficult to see everything happening before Easter (although we believe the judicial consultation has concluded), suggesting that the increased tariff might take effect on or around the anniversary of the introduction of the reforms i.e. at the end of May 2025.

Second is the publication of a report on the impact of the reforms made by the 2018 Act, which must cover not only the whiplash reforms but changes to the personal injury discount rate as well (which is governed by Part 2 of the Act). Insurers are required by Part 3 of the Act to provide audited claims and premium data to the regulator and to the Treasury, and the latter must provide a report to Parliament by 1 April 2025 that “(a) summarises the information provided [by insurers] about the effect of Parts 1 and 2 of this Act, and (b) gives a view on whether and how individuals who are policy holders have benefited from any reductions in costs for insurers.”

The imminent publication of the information provided under this so-called ‘savings’ provision will once again bring the cost of motor insurance into the policy spotlight and could provide further impetus to the work of the government’s motor insurance taskforce. After a high-profile launch in October, there appears to have been little visible activity.

The resignations of the taskforce’s two Ministerial sponsors may have set back its progress to some extent, but over the next few weeks we expect the publication of the ‘savings’ report and the discussions in Parliament about the new whiplash compensation tariff are likely to revive debates across the industry and in the mainstream media about the cost of personal injury claims and the price of motor insurance.