Overview of the Act
- The purpose of the Act is to reform the claims process for road traffic accident related whiplash injuries, and to make changes to the way in which the personal injury discount rate, applied to lump sum awards of damages for future loss, is set.
- The Act is in 3 parts:
- Part 1 concerns claims for whiplash injuries, where the duration of the injury (or injuries) does not exceed two years. It provides a definition of a "whiplash injury", which may be amended by regulations, and subjects damages for pain, suffering and loss of amenity arising from such injuries to a tariff. It also requires medical evidence to be obtained before a whiplash injury claim may be settled.
- Part 2 makes provision regarding the personal injury discount rate. It introduces a requirement for regular reviews of the rate and specifies whom the Lord Chancellor, who sets the rate, must consult in conducting a review. It also changes, for the purpose of setting the rate, the level of risk that an investor of damages is assumed to be willing to take in investing his or her lump sum award of damages for future financial loss from "very low" to "low".
- Part 3 contains general provisions that apply to the Act: it makes provision to enable the Treasury to specify that insurers provide information to the Financial Conduct Authority about the effects of Parts 1 and 2 of the Act on individual customers in England and Wales who have purchased insurance policies which include cover for personal injury. It also makes the necessary legal provision for the short title of the Act, the extent, orders, regulations and parliamentary procedures, and powers to make consequential, incidental etc. provision.
