Legal blog: Let’s take the sting out of whiplash

I am not a hypochondriac. I’m rarely ill and have a ‘get on with it’ attitude when I am. I have been getting worried about my neck though. I live in the North West of England and, according to data (and Jack Straw), that means I have one of the weakest necks in Europe. Indeed, the North West has a higher proportion of private car insurance claims involving bodily injury than Nevada, which at 40% is the highest ratio in the USA.

Not good news, so when I sneezed the other day – the type of sneeze that gets you a “bless you” from the other end of the office – I instinctively put my hands up, partly to muffle the sneeze and partly to check that my head was still on my shoulders.

Joking aside, much has been written recently on the UK phenomenon that is whiplash. Whiplash claims have become part of the fabric of any road traffic accident and they, and the attendant legal costs, have played a significant role in driving up the cost of living for us all.

The victim of a road traffic accident has become a valuable commodity – traded for anything up to £900. Given this, an industry has grown up around capturing and selling non-fault victims to the highest bidder. Whiplash claims, which are based predominantly upon subjective evidence with rarely any physical indicators of harm, are the raw material of this industry.

The frequency of whiplash has risen beyond expectations while the number of road accidents has fallen. The cost of these claims is passed on to the insurance-buying consumer, local authorities, self-funding corporations and the taxpayer. This is reflected most obviously in renewal premiums, but, indirectly, taxes and the price of goods and other services are also affected.

So how should we tackle the whiplash ‘epidemic’? How can we ensure we pay genuine whiplash claims where the harm has had a meaningful degree of impact on the claimant’s day-to-day life, but dispense with the frivolous and exaggerated claims where there was no injury or simply some discomfort for a day or two? How can we safeguard access to justice while recognising that the current system is dysfunctional and that our compensation system must be both affordable and sustainable?

The answer from the claimant lobby is that compensators should challenge whiplash claims and push back on this culture via the Courts. An interesting notion but let’s look at one recent example.On 19 December 2011, the Court of Appeal handed down a judgment where a saloon car had rolled into a stationary bus. The bus was repaired for the grand total of £427.50. Subsequently, 14 whiplash claims were presented and damages awarded.

The hard fact is that if a claimant says he had whiplash and has a medical report to support this then a court will award damages no matter how trivial the impact. No physical or mechanical threshold will deal with that – if there is an assertion of an injury then the claimant will more often than not succeed.

So what is the answer? FOIL believes the answer lies in controlling the level of legal costs payable after such claims. The proposed banning of the recoverability of success fees is definitely a step in the right direction but the levels of recoverable legal fees also need to be substantially reduced.  

At present, a claimant lawyer can pay up to three quarters of the fees likely to be recovered on an RTA Portal case for a referral. This implies that a profit can still be made on the remaining figure of something in the region of £400.

We need to take the ‘fat’ out the system, reduce legal costs inside and outside of the portal and remove this perverse incentive to drive more and more claims. Claimant lawyers only pay such sums because they can. There must be a meaningful reduction in legal costs to eliminate frivolous claims, leaving the genuine and meaningful claims to be dealt with in a system that strives to put the injured claimant back at the centre of the process. 

FOIL urges the Government to take a robust position in its forthcoming costs consultation and take this opportunity to rein in the UK whiplash phenomenon.

The neck? That was fine. I am still worried though – can I claim compensation for that?

Don Clarke, FOIL President