RTA Whiplash Reforms: Options for Exiting the Market

rta whiplash reforms

The Whiplash Reform Programme came into force on 31st May 2021 as a result of the Civil Liability Act 2018. The reforms change the way in which RTA whiplash claims are handled. The main changes introduced include:

  • The introduction of a fixed tariff for whiplash injuries sustained as the result of an RTA. This tariff will be split into two categories; the upper tariff, which will include both whiplash injuries and minor psychological injuries, and the lower tariff, which will be designated to claimants with only whiplash injuries. The tariffs were set by the Lord Chancellor to control costs and to ensure that compensation is proportionate.
  • The extension of the small claims track limit for road traffic personal injury claims from £1,000 to £5,000. This limit applies only to the figure for pain, suffering and loss of amenity resulting from the injury. For the value of entirety of the claim, the small claims track limit will remain at £10,000.
  • A ban on RTA whiplash claims being settled without medical evidence; this means that all claimants will be required to have an examination with a medical expert and obtain a medical report to document the extent of their injuries.
  • The introduction of the Official Injury Claim Portal, which allows claimants to represent themselves in these types of cases.


The outcome of the 31 May 2021 reforms for the Claimant may means that legal costs are not recoverable, and thus, some may find it difficult to obtain legal representation for their case.

The Ministry of Justice have provided a “Guide to Making a Claim” for self-representing claimants, and have also provided a “Guide to Practice Direction 27B ” to help them understand the court process.


How have the reforms impacted the market?

The RTA whiplash reforms have had a major impact on the market and have led to many challenges for claimant personal injury solicitors in the RTA market.

There has been an overall reduction in RTA claims; also impacted by the pandemic which has contributed to this reduction as there were less cars on the roads during lockdown periods and consequently fewer accidents.

Some claimant solicitors have adapted well to the changes, and it is suggested that around 90% of claimants are still being represented in these types of cases.

As solicitors are no longer able to recover their costs for whiplash cases, many have introduced contingency fees which are payable by the successful claimant, with some firms setting their rate as high as 35% of damages.

For many in the RTA market, the challenges of these reforms in combination with the potential of  clinical negligence reforms have led to them considering their options, with an overall increase in solicitors wishing to exit the RTA market due to reduced profits.


Options for those looking to exit the RTA market

If the RTA whiplash reforms have led to you questioning your firm’s future in the RTA market, it is important to note that there are many viable routes to help you leave the market. Some of your options for leaving the market include:

  • An outright sale – If you run a law firm focused solely on RTA, you could sell your firm to a single purchaser; however, this will usually involve a heavy discount and you will rarely obtain the true value for your work in progress.
  • Restructuring – You may wish to restructure your law firm and exit the RTA market to focus on more profitable areas of law. Restructuring will usually involve running off your RTA files and selling WIP to a single purchaser at a discounted rate or using Recovery First  to exit the market and realise your true WIP value.
  • Phased exit – Most exits from a legal market will involve some sort of phased strategy. The Recovery First model allows you to leave the RTA market using a phased approach. Using this approach allows the staff in the exiting department to focus solely on the files which are capable of settlement before a target date. This is achieved by identifying files which are unlikely to settle before this target date and transferring those files to our panel of solicitors early using our usual file runoff methodology. Further reviews of files may take place throughout the process and where appropriate those files transferred to the panel at any point, with the remaining files being transferred 4 weeks before  the target date.
  • Merging/ not continuing in RTA – You may wish to consider merging your firm with another. Using Recovery First  will allow you to offload your RTA files before the merger takes places, whilst ensuring you get the full value of your work in progress. 

Why Choose Recovery First?

Recovery First offers a unique service to any law firm wishing to exit any market. We provide a positive option for those wanting a structured exit from the RTA market following the RTA whiplash reforms.

Typically, those exiting are taken down a path of selling their WIP in bulk to a single purchaser, often at a heavy discount. At Recovery First, we offer an alternative approach to ensure you retain the recoverable value of your WIP in a fully outsourced, managed, and compliant run-off, plus an entitlement to an equivalent proportion of the success fee / deduction from damages.

The unique scheme offered by Recovery First is suitable for both law firms and professional advisors. Our team manage the transfer of files from start to finish; placing case files with an approved panel  law firm to protect the integrity of the client’s case, while at the same time maximising the value of the work in progress.

We guarantee 100% confidentiality for all clients.

If you would like to find out more about Recovery First’s process, please get in touch on a confidential basis direct via email david.johnstone@recoveryfirst.co.uk, telephone 07887796989, or contact Sally Dunscombe at sally.dunscombe@recoveryfirst.co.uk or 01357 440140.

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