Following the scrutiny of the whiplash reform report, the Supreme Court has upheld the Court of Appeal’s decision in Hassam & Anor v Rabot & Anor [2023] EWCA Civ 19, providing clarity on the correct approach to assessing damages in mixed injury cases. While this ruling brings certainty to the UK legal landscape, it also highlights the broader issue of how whiplash injuries are treated in other jurisdictions. In Cyprus, for example, a comprehensive framework for addressing whiplash injuries remains absent from the public discussion—despite the need for it. As car insurers continue to benefit from the UK’s whiplash reforms, drivers are still grappling with rising premiums. For further information regarding the whiplash reform report, click here.
Background: Mixed injury cases
Mixed injury cases involve claimants who suffer both whiplash injuries, covered by the fixed tariff system in the Whiplash Injury Regulations 2021, and additional non-whiplash injuries, which are assessed under common law. The Supreme Court’s unanimous ruling in Hassam v Rabot rejected the appeal and cross-appeal on how judges should value such claims, affirming that courts should calculate both tariff and common law damages but take a “step back” to avoid double recovery for pain, suffering, and loss of amenity (PSLA).
The Correct Approach to Mixed Injury Damages
The Supreme Court considered three potential approaches:
- Defendants’ Approach: Suggested adding only damages for non-whiplash injuries to the tariff amount, ensuring no overlap. This was rejected.
- Claimants’ Approach: Proposed adding the tariff and common law amounts without any deductions for double recovery, which was also rejected.
- Court of Appeal’s Majority Approach: Combining the two damages amounts while taking a step back to ensure no overcompensation, with the caveat that total damages should not fall below the amount that would be awarded for non-whiplash injuries alone. This approach was preferred by the Supreme Court.
The decision ensures that claimants are fairly compensated without the risk of double recovery, while maintaining the established common law principles that apply to non-whiplash injuries.
Car Insurers and Whiplash Reforms
In the UK, the Hassam v Rabot ruling has solidified the approach to mixed injury claims, but car insurers have continued to benefit from the 2021 Whiplash Reforms. Since these reforms were introduced, car insurers have saved £1.7 billion on injury claims, thanks to simplified claim processes and reduced payouts for whiplash injuries. The reforms aimed to curb fraudulent and exaggerated claims, which were burdening the insurance industry.
However, the reforms also raised the threshold for legal fee coverage from £1,000 to £5,000, leaving many claimants without legal representation for lower-value whiplash claims. Moreover, compensation amounts for whiplash injuries were reduced, resulting in lower payouts for claimants.
Rising Car Insurance Premiums
Despite these savings for insurers, car insurance premiums have continued to rise, driven primarily by increasing vehicle repair costs. According to the Office for National Statistics, car insurance premiums surged by 85% after the reforms were introduced. Repair costs, not injury claims, now account for nearly two-thirds of motor insurance claims, with vehicle repair expenses rising by 31% in 2023.
Lessons for Cyprus: Addressing Whiplash Injuries
The experience of the UK’s Whiplash Reforms and the Supreme Court’s ruling in Hassam v Rabot offers valuable lessons for Cyprus. A comprehensive framework for handling whiplash injury claims could benefit both claimants and insurers by offering clarity and structure. By implementing a system that reduces fraudulent claims, while ensuring fair compensation, Cyprus could curb rising insurance premiums and prevent legal and financial imbalances in the system.
Moreover, Cyprus could consider establishing a system similar to the UK’s Official Injury Claim (OIC) portal, allowing claimants to file claims for minor injuries independently. This would not only reduce legal costs but also streamline the claims process. By encouraging a transparent and efficient system, Cyprus can protect both its motorists and its insurance industry.
Conclusion
The Supreme Court’s decision in Hassam v Rabot brings much-needed clarity to the approach for assessing mixed injury claims in the UK, ensuring fair compensation for claimants without the risk of double recovery. However, the rise in car insurance premiums driven by repair costs, despite the savings from whiplash reforms, underscores the complexity of balancing fairness with financial sustainability in personal injury claims.
By Eva Manolova and Despina Theofanous
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