UK Supreme Court clarifies proper approach to valuing “mixed” Official Injury Claims (OIC)

The Supreme Court has delivered its judgment in Hassam v Rabot and Laditan v Briggs, more or less a month after hearing the matter on 20 February.

The appeal was brought by the Association of British Insurers (ABI) to determine how so-called mixed injury disputes – involving claims for both (i) a qualifying whiplash injury, and (ii) an additional injury or injuries – should now be valued following the introduction of the whiplash reforms in May 2021.

As a result of the reforms, a qualifying whiplash injury is now subject to fixed sums of compensation in accordance with the Whiplash Injury Regulations 2021, whereas additional injuries are each assessed by reference to the Judicial College Guidelines, aggregated and then subject to an adjustment to reflect the total or overlapping effect of all injuries. That adjustment – supported by the Court of Appeal’s authority in Sadler v Filipiak [2011] EWCA Civ 1728 – is designed to avoid over-compensation or double recovery.

The question for the Court was whether – and, if so, how – compensation should now be adjusted where one of the injuries is subject to a statutory award but the injured party’s pain, suffering and loss of amenity (PSLA) was caused by both the whiplash injury and at least one additional injury. 

Ultimately, the parties’ arguments were framed in terms of identifying which of three options (if any) advanced before the Court of Appeal should be adopted for valuing these claims:

• [57] … It was suggested in the course of oral argument that the case was really about whether, in cases of this kind, the damages allowed for pain and suffering and loss of amenity (PSLA) concurrently caused by both whiplash and other injuries are to be: 
• (i) only that part of the tariff amount allowed for PSLA [Option 1], or 
• (ii) the part of the tariff amount allowed for PSLA and the amount allowed for PSLA by the normal common law compensation for the other injuries [with no adjustment] [Option 2], or 
• (iii) something in between [Option 3]… 
• In essence, the defendants supported the first solution, the interveners supported the second solution, and the claimants supported the second, alternatively the third, solution.

The Supreme Court’s judgment

The Supreme Court’s unanimous decision was that general damages for PSLA caused by both a whiplash and other injuries should be compensated by continuing to assess the whiplash and other injuries separately – using the fixed tariff amounts and Judicial College Guidelines respectively – combining each subtotal, and then applying a conventional Sadler reduction (Option 3).

However, the final combined award cannot be less than the compensation that would have been recoverable for the non-whiplash injuries alone. 

The Court laid out a step-by-step approach at [52], which can be summarised as follows:

1. Use the 2021 Regulations to find the fixed amount for the whiplash injury (the "tariff amount");
2. Use the Judicial College Guidelines to value all other non-whiplash injuries;
3. Add the amounts from steps 1 and 2 together;
4. Consider if the total amount from step 3 should be reduced to prevent compensating twice for the same injury (a Sadler adjustment);
5. Apply any reduction to the non-whiplash injuries only (Step 2);
6. Confirm the final total is no less than what would have been awarded for the non-whiplash injuries alone, following the traditional common law approach;
7. Remember, in exceptional cases, the tariff amount for the whiplash injury in Step 1 can be increased by up to 20%.

In dismissing Option 1, the Court was clearly troubled by the fact that additional injuries sustained by vehicle occupants, who also experienced a qualifying whiplash injury, could be worth less where a claimant’s PSLA was partially attributable to a qualifying whiplash injury. The desire to maintain parity between additional injuries sustained by vehicle occupants and those sustained in another context which would, for example, potentially trigger a response from an employer’s liability or public liability policy is understandable. 

What does this mean for you?

The Supreme Court’s judgment signifies “business as usual”. The consequence of Option 3 was that, despite Parliament legislating to reduce the high number and cost of whiplash claims, vehicle occupants could be incentivised to bring claims for de minimis or trivial injuries that, prior to the reforms, they may not have been inclined to advance. Simply put, non-tariff injuries are more valuable. 

However, insofar as that was considered an issue, the Court took the view that this was a matter for Parliament; see [42]: “Even if there were to be evidence suggesting that claimants might be able to thwart part of the purpose of the whiplash reform by claiming for multiple injuries, that would be a policy problem for Parliament to address and would not be something that the courts could, or should seek, to deal with by distorting the legislation.”

There is, perhaps, now greater scope for a higher proportion of these claims to breach the £5,000 upper limit for adult occupants bringing personal injury claims under the RTA Small Claims Protocol. That issue will be compounded by two factors. 

The recent publication of the Judicial College Guidelines which uplifts all figures by +22% to reflect increases in the Retail Prices Index between editions.

Additionally, on 6 February, the Ministry of Justice published a call for evidence to inform the statutory review of the tariff amounts for qualifying whiplash injuries, which is required to be completed (not commenced) by 31 May 2024, per s. 4(2) of the Civil Liability Act 2018.

Thus, despite Parliament legislating for fixed sums of compensation for whiplash injuries (and minor psychological injuries) lasting up to two years, one imagines that a whiplash injury with a shorter prognosis period, accompanied by an additional injury with a similar prognosis, is now likely to take such claims out of scope.

If that’s correct, insurers may wish to consider whether to anticipate a greater proportion of liability disputes, or even non-contentious claims with incomplete medical evidence that may possibly suggest claims incubation.

See full judgment of [1] Hassam v Rabot [2] Laditan v Briggs [2024] UKSC 11.