Whiplash Injury (Amendment) Regulations 2025

Lord Sandhurst Excerpts

Tuesday 6th May 2025 Grand Committee

[Lord Jones (Lab)]

My Lords, it is good to follow the noble Lord, Lord Marks, and his committed statement. I thank the Minister for his helpful and thoughtful introduction.

I rise on the principle that the Executive should be held to account—in this instance briefly and positively—and to acknowledge that it is traditional to get orders and regulations through in the way we do, week in, week out in your Lordships’ House. The usual channels usually get it right, but so often our regulations and orders affect thousands or millions of people. Perhaps more of them should have been debated more closely, sometimes even in the Chamber.

However, having read the declaration in the informative Explanatory Memorandum, who would wish to challenge these regulations? The Minister in another place is a KC, and we have the deputy director for civil justice and law policy at the Ministry of Justice, and the most persuasive and courteous of Ministers in your Lordships’ House—and the instrument is laid by command of His Majesty.

I support and welcome the regulations, which offer increased amounts. This and only this differentiates them from the 2021 regulations. The legal framework has not changed. If lower premiums follow, so much the better, but one notes that premiums are imposed by the insurance industry, which does not always deliver on what it infers should be the case.

Can the Minister indicate how many whiplash cases entered our courts in, say, 2022 and 2023? That response may come later, rather than here and now, but can he reference in it the numbers for Wales, as well as those for England? Does the department have any rough estimate—for that is all it can be—of the percentage of likely fraudulent and contrived cases that enter our courts?

[Lord Sandhurst (Con)]

My Lords, as the Minister outlined, these regulations follow the Government’s statutory review of the Whiplash Injury Regulations 2021. The proposed amendments would increase compensation for whiplash injuries occurring on or after 31 May 2025 from 14% to 15% across all tariff bands. This increase is intended, as we have heard, to reflect inflation since the original tariffs were introduced. It includes a forecasted buffer to cover inflation over the next three years.

The whiplash tariff system introduced by the previous Conservative Administration was aimed at reducing the number and cost of minor injury claims and lowering motor insurance premiums. It introduced fixed compensation levels for whiplash injuries sustained in road traffic accidents and moved away from case-by-case judicial assessment. The structure of the tariff is not altered by this instrument; what changes is the monetary value assigned to each tariff band. The uplift of 15% is designed to reflect inflation since 2021; it includes a buffer to account for expected inflation until the next statutory review, scheduled for 2027.

In principle, we support this change. It is reasonable that compensation should keep pace with the cost of living. We also welcome the Ministry of Justice’s stated intention to work with MedCo to improve the quality and consistency of medical reporting. Reliable, clear medical evidence is essential to the fair operation of this system, but we have some questions and concerns.

This instrument introduces a significant and untested change in how compensation levels are set. Rather than updating tariff figures in legislation, as had been the practice, this uplift includes a forward-looking inflation buffer based on economic forecasts. As the Secondary Legislation Scrutiny Committee pointed out, this is without precedent: no other statutory compensation scheme relies on forecasted inflation in this way. Forecasts, as we know, are often subject to revision and uncertainty. There is a real risk that this buffer may underestimate actual inflation, leaving claimants undercompensated over time. I would therefore be grateful if the Minister could provide clarity on this point. What assurances can be given that the inflation buffer will be accurate and what mechanism will be in place to ensure that claimants are not short-changed if those forecasts prove incorrect?

In addition, we are concerned about how the Government have represented feedback from their public consultation. The Secondary Legislation Scrutiny Committee made it clear that over 90% of respondents opposed the buffer model. That is not a mixed view, even if the reasons given differed; it is, in fact, an overwhelmingly critical view.

We also note continuing concerns raised by third parties. The Motor Accident Solicitors Society, for example, said that the tariff system and the official injury claims portal have damaged access to justice, particularly for those unfamiliar with legal processes or without representation. It also argues that the original tariff amounts were too low—significantly lower than those typically awarded under Judicial College guidelines for comparable injuries outside a motor vehicle context. While this instrument focuses narrowly on adjusting tariff levels, it is part of a much wider macro-reform framework that remains highly contentious.

In conclusion, we support the uplift proposal in this instrument; ensuring that compensation keeps pace with inflation is necessary and fair. However, this policy cannot be left to run on autopilot. It must be subject to scrutiny, accountability and, where necessary, reform. We will support this instrument today, but we will continue to monitor closely whether the whiplash reforms are delivering on their promises of fairness, accessibility and justice.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I thank all noble Lords for their support for the measures in this statutory instrument. On the points which noble Lords have made, the noble Lord, Lord Marks, said he supported it, but he repeated his reservations, which he originally articulated in 2018. Just for the record, there is some judicial discretion. All tariff awards can be increased by up to 20% by the court in exceptional circumstances, so I take the noble Lord’s point but there is some judicial discretion in the level of the awards. He asked how much money has been saved. I cannot give him an answer in a figure. However, HM Treasury laid a report on this in Parliament on 27 March 2025. The report details a summary of the information provided by insurers, which have concluded that policyholders benefited from a reduction in insurance costs through paying lower premiums over the period 2020 to 2023. As it is factual reporting of the information from insurers to the Treasury via the Financial Conduct Authority, the report does not represent the Government’s findings or conclusions. Separate to this report, the Ministry of Justice will undertake a post-implementation review of the whiplash reforms later this year. I hope that last point goes some way to reassuring the noble Lord, Lord Sandhurst. We have no intention of running on autopilot, and all government policies are kept under review. It is certainly the intention in this case as well.

My noble friend Lord Jones was characteristically very generous in his assessment of the Government’s approach overall, so I thank him for that. Regarding the volume of claims in England and Wales, in 2022, there were 1,827, and in 2023 there were 9,335. I am afraid I do not have a breakdown of how much of that is in Wales alone. If I am able to get those figures, I will let him know. I also do not have a percentage for the likely fraudulent claims. Those numbers are not monitored as such because there are different types of fraud. Nevertheless, if there is any data that I can include in my letter to my noble friend, I will do so.

On the Explanatory Memorandum, the calls for evidence and the different views that the noble Lord, Lord Sandhurst, pointed to, more than 108,000 unrepresented claims have been created in the OIC portal since it since it was implemented. The proportion has increased from 9% in the first year to 12.7% as of 31 March 2025, so there is an increase in unrepresented claims, which we think is a good thing. In comparison, only 74 applications were made to the previous system by unrepresented claimants in 2021, so we think that the system is as a whole working well. Nevertheless, I do not want to give any hint of complacency. I undertake that we will continue to review the system and see that it continues to develop, as we hope it will.

Motion agreed.