Whiplash reform is not over yet, but will part two still be fit for purpose?

Part one of the Civil Liability Act 2018 – colloquially known as the whiplash reform – finally came to fruition in May this year after a number of deadline changes, in part due to the Covid-19 pandemic. Third time lucky, as they say.


As a result, the claims ecosystem, insurers and law firms have been grappling with the new Official Injury Claim (OIC) portal, which enables litigants in person to progress their own whiplash injury claims online. Compensation awards are based off a shiny new tariff table too, with payouts based on injury recovery times.


Alongside the FCA’s fair value focus and general insurance pricing revamp, the introduction of the OIC portal has been a huge change for the industry to get its head around.


Pile on top the ramifications of Covid-19 as well as the FCA’s pricing reform and insurance professionals operating in the motor and personal injury arena have had a lot of different balls in the air over the last year or so.


But, there’s no time to take a breath just yet.


Industry rumblings predict that part two of the whiplash reform – which will centre around credit hire and rehabilitation services – is set to be revealed early next year.


Although some commentators suggest we could see the structure and detail of part two before Christmas, it’s more likely that it will be unveiled in 2022.


The key issue on the tip of the industry’s tongue, however, is whether part two will still be fit for purpose in the post-pandemic era?


The Civil Liability Act gained Royal Assent in December 2018. The OIC portal was originally meant to go live in April 2020. All this preparatory work pre-pandemic feels a long time ago now and obviously won’t have been influenced by today’s ‘new normal’. Should plans hashed out four to five years ago still go ahead in the same format?


Some industry professionals I’ve spoken to feel the current part two is simply irrelevant now and the process must be started again. They believe a new consultation should be on the cards - even if the same questions are asked of market participants, fresh responses will enable part two plans to better reflect today’s environment post-Covid. This seems sensible, in my opinion.


Controlling credit hire

Although part two of the whiplash reform may need a refresh, it shouldn’t be scrapped completely.


In part, this is because the credit hire sector in particular has seen “bad behaviours creep back into the industry” following the onset of the Covid-19 pandemic, according to Kirsty McKno, managing director of credit hire firm Cogent Hire, part of Handl Group.


Speaking back in March 2021, McKno told me: “One of the issues is we haven’t moved on as an industry since part two was first looked at. In fact, we’ve probably gone backwards as an industry.

“The government put forward lots of ideas and solutions which, at the time, everybody said ‘no, that can’t happen, we’re already in a place where we control ourselves’, which wasn’t quite true even then.


“But since then, we’ve gone backwards and Covid has exacerbated that problem. We’ve started to see problems of old and bad behaviours creep back into the industry.


“My worry would be that when part two comes out, if the industry is asked the question: ‘what have you done to move yourselves forward?’, there would be very little that they could answer with in a positive way.”


Currently, the credit hire sector falls outside the regulatory scope of the FCA, which only regulates claims management companies that deal in personal injury claims.


The credit hire industry has, therefore, been self-regulating, in part through the General Terms of Agreement (GTA) – this creates standards between insurers and credit hire firms.


The motor insurance sector will all be watching and waiting with bated breath to see what happens around part two of the whiplash reform come 2022 - whether the government will consider industry concerns and re-do some of its past work remains to be seen.


Considering how much the motor market has changed as a result of the pandemic – especially in terms of the volume of traffic, the appetite for usage-based cover and telematics, the different nature of claims nowadays and driving behaviours – it makes sense for the government to take a step back and properly evaluate its incoming rules.


Pushing a square peg into a round hole won’t benefit anybody.”


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