Post-whiplash reforms strategy

NAHL Group plc (NAHL) has announced its response to the Government's reforms affecting the personal injury sector.

The Government's reform package, first announced in November 2015, will benefit motorists by reducing the number and cost of minor, exaggerated and fraudulent road traffic accident (RTA) claims. The Government's new measures, commonly known as the ‘whiplash reforms', will go into effect from 31 May 2021 - the implementation date. The whiplash reforms, which only apply to RTA accidents occurring on or after 31 May, change the way low-value personal injury claims resulting from RTA's are managed.

The reforms introduce fixed tariff damages for RTA whiplash claims and increase the size limit of claims managed through the RTA small claims track from £1,000 to £5,000. As a result, potential damage awards and associated costs for claims managed through the RTA small claims track will be lower. This change is therefore expected to reduce some law firms' potential fees from such cases.

Over the past five years and in anticipation of the changes, NAHL has been developing its transformation strategy to continue to support consumers with any level of RTA claim whilst generating increased value in a post-reform environment. This has involved transitioning from a claims management company into a modern, technology-enabled law firm, National Accident Law. As an end-to-end legal services provider, the business is able to process RTA claims, including small claims and an increasing number of non-RTA claims.

In anticipation of the incoming reforms key upgrades were made to National Accident Law's call centre technology, digital journey and customer triage processes at the end of last year. Since then, the majority of new RTA claims have been processed by National Accident Law. The necessary changes to enable the processing of all RTA claims - including small claims - under the new system, will be completed ahead of the Implementation Date in May. By the middle of this year, it is anticipated that an increased proportion of non-RTA claims will be transferred into National Accident Law.

According to the Government's impact assessment, the reforms could affect up to 90% of RTA personal injury claims, and on implementation will lead to consumer savings of around £1bn, which is on average £40 per insurance policy. It is also expected that these savings will be passed on by insurers to consumers, and for the impact of these reforms on the cost of motor insurance to be monitored.

Jonathan White, Legal and Compliance Director, National Accident Law, said:

We've been planning for these changes and executing on our business transformation strategy since the Government first announced these reforms in 2015. A lot of time and energy was spent successfully launching National Accident Law in 2019 and we're very well prepared for the ‘whiplash reforms'.

Moving forward, we'll continue to invest in our operations, people and technology to deliver service excellence, enhance our processing efficiencies and customer experience, for every type of claim.