Insurers’ appeal over court’s hybrid injury decision criticised as case backlog mounts

Last week’s (17 February 2023) decision by the ABI to lodge an appeal against January 2023’s Court of Appeal ruling on the way in which compensation for multiple injuries arising from road traffic accidents are assessed has been criticised by lawyers and consumer groups.

The case regards situations where mixed or hybrid injuries that combine whiplash and non-whiplash elements are registered via claims on the government’s Official Injury Claim (OIC) portal, which was introduced in May 2021.

This online service is primarily designed to process personal injury claims for whiplash injuries resulting from a road traffic accident. Compensation amounts for these specific claims are defined by a set tariff table that was introduced at the same time as the OIC portal.

However, the Court of Appeal became involved in October 2022 as the insurance industry was unsure how to deal with increasing OIC submitted claims that included both whiplash and non-whiplash injuries, such as tinnitus or psychological harm.

The court’s subsequent ruling in January determined that personal injury claimants can recover damages for both whiplash and non-whiplash injuries without one cancelling out the other.

However, the ABI – on behalf of the insurance industry – has now appealed the Court of Appeal’s judgment, fearing that this will open the door to the “double counting of injuries” and, in turn, increase the level of awarded compensation.

This could force underwriters to raise motor premiums, the ABI explained, and could undermine the aims of the whiplash reform altogether.

A spokesperson for the ABI said: “The ABI was disappointed with the majority judgment handed down at the Court of Appeal on the mixed injuries test cases. [This] risks undermining the intent of the whiplash reform and opens the door to double counting of injuries.

“In the face of rising cost pressures, motor insurers are doing all they can to keep prices competitive for customers, but the Court of Appeal decision will only make it harder to keep premiums as low as they otherwise could be.

“We note the dissenting judgment from the Master of the Rolls and, therefore, in the interests of motor insurance customers, we are seeking permission from the Supreme Court to appeal”.

Increased uncertainty

The ABI’s stance has prompted criticism from legal experts who believe the association’s appeal will delay the settlement of thousands of cases, leaving claimants unsure as to whether they will be compensated.

Matt Currie, chief legal officer at Minster Law, warned that the ABI’s appeal may end up costing the industry.

He said: “It’s disappointing that insurers have taken the decision to seek leave to appeal to the Supreme Court on the ruling of the Court of Appeal on mixed injuries.

“The failure of the Ministry of Justice in dealing with the issue of valuing multisite injuries prior to [the whiplash reform] going live [has] caused uncertainty for consumers and delay to many settlements.

“We had hoped that the Court of Appeal decision would have brought that uncertainty to an end and allowed us to work collaboratively with insurers, to identify how we can start delivering outcomes for the customer - this was, after all, how the process was intended to work at its inception.

“[While] we now wait to see if leave to appeal is granted, consumers are left with more uncertainty, which creates further delays to a significant number of settlements – whilst [also] keeping them on the reserve books of insurers and increasing costs.”

Creating a ‘legal limbo’

Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations (ACSO), added that the industry was in danger of cutting off its nose to spite its face.

“It is unfortunate that the insurance industry has chosen to go down this route,” he said.

“The Court of Appeal decision should enable thousands of disputed claims currently held up in the system to be settled and for injured people to be able to get on with their lives. Instead, they could remain in a legal limbo.

“The insurers’ decision is doubly perverse because they could also have got on with settling the claims backlog, some of which would have to be litigated, so we would have seen some much needed easing of pressure on the civil courts.

“In this respect, insurers seem to be cutting off their nose to spite their face.”

Maxwell Scott added that he hopes the Supreme Court declines the ABI’s application to appeal. However, “should it choose to hear the case, we would like to see the court rule in favour of the injured party, especially given the dramatically lower levels of compensation they now receive for whiplash injuries”.

He continued: “In this case, the relevant question to ask is surely who benefits? If the Court of Appeal decision is reversed, it will be insurers and their shareholders who will win, while consumers with multiple injuries lose.

“That seems unfair, unwarranted and unreasonable.”