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Claims and Coverage: U.K. plans reforms to auto insurance injury claims

In November 2015, there was a surprising announcement from the United Kingdom’s Chancellor of the Exchequer George Osborne: The U.K. plans to reform auto insurance injury claims and proposes instituting a threshold that sounds similar to Ontario’s, except that England is going further.

The proposed reforms would bar “minor whiplash claims” from recovering any monetary damages whatsoever.

“The government is determined to crack down on the fraud and claims culture in motor insurance,” the chancellor said. “This will end the cycle in which responsible motorists pay higher premiums to cover false claims by others, removing more than £1 billion from the cost of providing motor insurance.”

Osborne said the governments will consult on the measures in 2016.

More injuries will also be able to go to the small claims court, as the upper limit for these claims will be increased to £5,000 from £1,000. There are already complaints that this will result in a much-worse backlog in small claims court; however, the U.K. government has also pledged more court resources in response. These are certainly developments to watch closely.

England apparently has a culture of injury exaggeration, not necessarily duplicated in other European countries. According to statistics from one large insurance provider, 80 per cent of all personal injury claims from a motor accident in England are for minor whiplash-type injuries. This compares to just three per cent in France, an astonishing discrepancy perhaps speaking to cultural differences.

The U.K.’s Automobile Association, talking to a British financial web site, said the proposed reforms were a “big step in the right direction.”

Earlier this year, its research discovered that 11 per cent of motorists said they would make an injury claim following a collision caused by someone else, even if they were perfectly fit and well. So much for the proverbial British stiff upper lip.

As predicted, Osborne’s announcement was greeted with great enthusiasm by U.K. insurers. The goodwill apparently extended to their investors as well: The largest U.K. automobile insurers enjoyed a one-per-cent hike in their stocks during London trading on the day after Osborne’s November announcement as part of his Autumn Statement.

Personally, I recall when the Ontario government introduced the Ontario Motorist Protection Plan in 1990. Some plaintiff counsel panicked and left the jurisdiction. Bob Rae and others held large rallies, attended enthusiastically by lawyers from both the plaintiff and defence personal injury bars, against the proposed legislation.

The development was very concerning to us; times were changing rapidly. And nobody knew how the changes would affect their practice. Fast-forward 25 years and there is still plenty of legal work around, just of a different sort. It turns out, from the point of view of legal practice, not much has changed after all.

One U.K. insurer told the Daily Express it “pledged to pass 100 per cent of the savings to its customers” as a result of the proposed auto reforms. And it didn’t spare lawyers from its indictment of the expenses associated with defending against minor injuries.

“These measures will directly address motor fraud like crash for cash, reduce the volume of nuisance calls, remove costly lawyers from the process — for every £1 we pay in compensation we pay another 80p to lawyers — and save motorists more than 10 per cent on their premium.”


But this optimism may be misplaced. Ontario’s threshold was supposed to make defending claims less costly. But the results have proven that the litigation simply shifts into a different arena. And judging by Ontario’s experience, England will still definitely need lawyers to defend the integrity of the system.

Chella Turnbull, a lawyer practising personal injury litigation at Zuber & Co. LLP, is available at 416-646-3129 or

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