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Blog: Consumers will not benefit from Do-it-Yourself whiplash reforms

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Consumers will not benefit from Do-it-Yourself whiplash reforms
Mike Benner | 28 Jan 2021

Two things caught my eye in the sector news last week.

Firstly, the Government announced a further one-month delay to the whiplash reforms, now set back to May. This led to a flurry of comments from stakeholders raising various points, but on the whole frustration was a common thread. APIL continued to complain about the arbitrary deadline, query how the proposed bespoke court process will replace ADR, what the actual tariffs will be and how consumers are expected to know about the process.

Secondly, Consumer Intelligence reported that there had been a 2.5 per cent drop in insurance premiums in the last six months ‘thanks to reduced claims volumes.’ My many regular readers (!) will recall that two months ago I raised concerns, not for the first time, about insurer savings not being passed on to consumers in full. I make no apologies for raising the issue again.

These two news events are related because the way the Government justified its intervention into the soft tissue claims process was firstly by claiming that ‘the intended effects are to disincentivise minor, exaggerated and fraudulent claims so as to tackle the continuing high number and cost of claims’ and secondly that, the huge majority of us will all benefit from ‘savings, which insurers can pass back to policy holders in the form of reduced motor insurance premiums’. The clear expectation set in the Government’s impact assessment is that 85 per cent of savings to insurers will be passed back to consumers.

Throughout the passage and beyond of the Civil Liability Act APIL, as the champion of needlessly injured people, has always stood firm that the reforms were not required and that any savings that might arise for consumers will not be worth the erosion of justice. We fundamentally disagree with the Government’s overarching view that the compensation paid to claimants for soft tissue injuries is ‘out of all proportion to the level of injury suffered’ and that intervention in the market was justified by high levels of fraud. In 2019, just 1 per cent of all motor-related PI claims were confirmed as fraudulent. Injured people deserve greater empathy and better policy from Government.

If motor premiums had reflected the drop in injury costs between 2013 and 2019, the average premium should have fallen by £47, but they actually increased by £69. Across the UK’s 27.5 million motor insurance customers, £47 amounts to £1.3billion in savings for car insurers*.

During the pandemic the number of injury claims received by car insurers has fallen by 45 per cent and the cost of these claims by 39 per cent. That amounts to a £611m saving as a result of the drop in injury claims since last spring. This rather shines a light on the paltry 2.5 per cent savings from which consumers have benefited according to the Consumer Intelligence report, but it’s worse than that, since consumers have, for some time, also been paying through the nose before the pandemic despite consistently falling claims numbers and costs.

Based on past and current behaviour by insurers it looks like remarkably wishful thinking by Government that consumers will benefit to any significant extent from the reforms, let alone through an 85 per cent share of the savings made by big insurers as touted in the Impact Assessment.

As a result, given consumers remain blissfully unaware of what the ‘do it yourself’ whiplash reforms will mean to them when they are injured due to the negligence of someone else and that the bulk of the insurance premium cookie jar may end up with insurers, this may turn out to be one of the most unpopular reform measures in modern times. Sadly, unlike 2012’s ill-fated pasty tax it is still set to see the light of day.

It looks clear that consumers on the whole and injured people particularly, will be the losers from these reforms.

* APIL analysis of Association of British Insurer (ABI) data on motor insurance claim costs and insurance premiums, both accessed at

Past blog entries

A ‘no-fault’ system for clinical negligence claims will not work for anyone, 12 Apr 2022
We need peers to flex their political muscles again, 28 Mar 2022
How to solve a problem like e-scooters, 17 Feb 2022
Accident and negligence: what’s the difference and why does it matter? , 02 Aug 2021
Patient safety problems risk waning public confidence in the NHS , 20 May 2021
Effects of a change in the discount rate: what happens when a review is expected? , 16 Dec 2020
Three per cent drop in premiums does not reflect massive insurer savings, 09 Nov 2020
What help is out there for families when someone is injured?, 02 Nov 2020

About this blog

Mike Benner

Mike Benner is Chief Executive of APIL and is committed to injured people.