Whiplash tariff set to increase in 2025
The Lord Chancellor, Shabana Mahmood, has announced that the whiplash tariff is set to increase by around 15%. This rise accounts for inflation since the original whiplash tariff rates were introduced in 2021, and also includes a “buffer” to reflect expected inflation between now and the tariff’s next review in 2027.
What is the whiplash tariff?
In May 2022, the government implemented a tariff scheme for whiplash compensation claims arising from road accidents. The new tariffs significantly reduced the compensation for whiplash and other soft tissue injuries, and included only a minor uplift if the injured person has also suffered psychological harm.
Non-whiplash injury claims were unaffected by the tariffs. In early 2024, the UK Supreme Court confirmed in Hassam and another (Appellants) v Rabot and another (Respondents) that “mixed injuries” (where a claimant had suffered both whiplash and other physical injuries) that the non-whiplash injuries were calculated separately.
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Why is the whiplash tariff being increased?
Inflation has risen considerably since the tariffs were first calculated. In addition, the latest, 17th edition of the Judicial College guidelines used to calculate injury claims employed a considerable increase of approximately 22% on 16th edition rates.
A wider review on the effectiveness and suitability of the tariff scheme was due to be published earlier in the year, but the general election and change in government has delayed this review. It was reported that this broader review “will be completed in due course”.
When will the new tariff be introduced?
Under the Civil Liability Act 2018 ( the Act that created the tariff), the Lord Chancellor must consult the Lord or Lady Chief Justice. This is expected to take 8 weeks. The tariff must then be debated in parliament “as soon as… time allows”.
Why is the whiplash tariff so low?
The stated goal of the whiplash tariff was to reduce the cost of personal injury claims and discourage fraudulent cases. While intended to lower motor insurance premiums, the fixed compensation amounts are much lower than payouts under the old system. Even with the 15% increase, many feel the tariff prioritises savings for insurers over fair treatment for injured claimants. Critics argue it undervalues genuine injuries and limits access to justice.
Since the introduction of the tariff, motor insurance premiums have not fallen, rising 25% from 2022 to 2023.
Author:
Chris Salmon, Director
About the author
Chris Salmon is a co-founder and Director of Quittance Injury Claims. Chris has played key roles in the shaping and scaling of a number of legal services brands and is a regular commentator in the legal press.