Civil Liability Bill
On 20 November 2018 the long-awaited Civil Liability Bill passed the Lords without amendment.
Once it becomes law following Royal Assent, the Bill will bring forward significant changes to the bottom and top ends of the personal injury landscape.
The Bill provides wholesale amendments to disposal of “whiplash” claims, and creates a new statutory framework for setting the discount rate.
Whiplash reforms
Part 1 of the Bill makes provision for “whiplash” claims.
The Bill applies to “whiplash” injuries which persist, or are likely to persist, up to a maximum two years. Under section 1 of the Bill “whiplash” is defined as an injury to the neck, back or shoulder, save where it is part of or connected to another injury.
A new tariff system for compensation is introduced under section 3, which replaces traditional judicial assessment in line with the Judicial College Guidelines and comparable case. The tariffs are to be set by the Lord Chancellor, and reviewed every three years.
It is particularly noteworthy that damages recovered by a successful claimant under the tariff will amount to only a fraction of the current award. Although the Court retains a jurisdiction to award an uplift above tariff rates, that power is limited to exceptional cases or there the injuries are exceptionally severe.
| Injury Duration | Tariff | Judicial College Guideline (JCG) amounts (14th edition) Published September 2017 |
| 0-3 months | £225 | A few hundred pounds to £2,150 |
| 4-6 months | £450 | £2,150 to £3,810 |
| 7-9 months | £765 | £2,150 to £3,810 |
| 10-12 months | £1,190 | £2,150 to £3,810 |
| 13-15 months | £1,820 | £3,810 to £6,920 |
| 16-18 months | £2,660 | £3,810 to £6,920 |
| 19-24 months | £3,725 | £3,810 to £6,920 |
Further, the small claims limit for person injury claims is to increase – which is to be achieved through the introduction of separate Regulations alongside the Bill. The limit, which is presently set at £1,000 for PSLA, will increase to £2,000 for non-RTA matters and increase to £5,000 for RTA matters (save for vulnerable road users).
Under section 6 the Bill introduces a ban on regulated persons from making or offering a settlement on RTA related whiplash claims without appropriate medial evidence.
A new online portal will be created for administration of these claims, the design of which is intended to cater for litigants in person.
It is anticipated that the changes will come into place in April 2020, to allow for extensive testing of the online systems.
The discount rate
Part 2 of the Bill makes provision regarding the personal injury discount rate. The discount rate has been at -0.75% since 20 March 2017.
Under section 10 of the Bill, the setting of the rate will now have a statutory basis. The key features are that:
- that the Lord Chancellor is to set the rate, having consulted an expert panel and the Treasury;
- the first review must be commenced within 90 days of enactment of the Bill;
- the Lord Chancellor must decide the rate 140 days after the review period commenced;
- each subsequent review must be started within five years of the last review, and will have a 180 day review period.
The level of risk that an investor is assumed to take in investing damages is changed. Whereas previously the assumption was that a claimant would invest only in “very low” risk investment, the assumption is now that the claimant will make investments involving “more risk that a very low level of risk” but “less risk than…a prudent and properly advised investor”.
There remains some uncertainty as to the expected rate, but a rise from -0.75% to somewhere between 0% and 1% seems likely.
It is envisaged that the new rate will be in place at some time between April – June 2019.
10 December 2018
