Written evidence from Ken Oliphant, Professor of Tort Law, University of Bristol

Summary

• Evidence that the UK has been peculiarly vulnerable to increased numbers of whiplash claims is based on unreliable data that has been ‘cherry picked’ to support specific reform agendas.
• In fact, such data as are available demonstrate that, by most measures, the UK is not the ‘whiplash capital’ of Europe. Several other ‘compensation capitals’ can more plausibly be nominated.
• There is therefore cause to treat with suspicion the purported evidence base for suggestions that fraudulent or exaggerated claims of whiplash injury are common and a risk that reform will be driven by a desire to address a largely illusory problem while subordinating the interests of the majority of injured persons whose claims for compensation are entirely ‘genuine’.

1.         I write this submission in my personal capacity as an expert legal commentator over many years on the topics of ‘compensation culture’ and the specific issues relating to whiplash claims.[1] I have been Professor of Tort Law at the University of Bristol Law School since 2008, having been appointed to a faculty position in Bristol in 2006. Before then, I lectured at King’s College London (1988-1999) and Cardiff University (1999-2006). From 2009-2013, while on extended leave from Bristol, I was Director of the Institute for European Tort Law in the Austrian Academy of Sciences, Vienna.
2.         This written submission relates to two aspects of the inquiry’s terms of reference, namely the questions of the prevalence of RTA-related whiplash claims and whether or not fraudulent whiplash claims represent a significant problem. More specifically, it addresses the use or misuse of statistical evidence to exaggerate the problem of whiplash injury claims in the UK in comparison with other countries. It summarises aspects of my recently published article ‘ “The Whiplash Capital of the World”: Genealogy of a Compensation Myth’ that appears in the edited collection Damages and Compensation Culture: Comparative Perspectives (ed by Quill & Friel, 2016).
3.         In the last several years, the Association of British Insurers (ABI) has sought to highlight what it sees as ‘a whiplash epidemic’ gripping the UK.[2] A big part of its media campaign is its repeated use of the slogan that the UK is ‘the whiplash capital’ of Europe, or even the world.[3] The claim has been repeated by a number of media outlets[4] and politicians.[5] In her foreword to the Ministry of Justice’s whiplash consultation, launched in December 2012, Helen Grant MP, the Parliamentary Under-Secretary of State for Justice, had gone even further, inflating the claim to be that the UK is ‘the whiplash capital of the world’.
4.         In fact, the evidence to support the claim that the UK is the whiplash capital of the world is very flimsy. Such evidence as there is has been misleadingly and tendentiously presented by participants in the public debate about the alleged ‘compensation culture’. Actually, the same evidence makes clear that, by most measures, the UK is not the whiplash capital of the world or even of Europe.
5.         The main supposed evidence comes from a flawed study by the Comité Européen des Assurances (CEA) in 2004 entitled ‘Minor Cervical Trauma Claims: Comparative Study’ (hereafter CEA Study). The methodology employed is not stated but anomalies in the results suggest it must have been inadequate for the production of reliable data. It seems very likely that the various national insurance associations that supplied the data were simply counting different things. Only eight national associations provided data relating to whiplash claims. Even if one ignores these deficiencies, it is apparent that that data do not provide robust support for the ‘whiplash capital’ claims made by the ABI and others.
6.         That data in fact show that Italy had far more whiplash claims in the period surveyed than the UK (almost 50% more). Italy paid out more than twice as much in compensation for whiplash injuries than the UK too. The average cost of a whiplash claim in the UK was lower too – not just than in Italy but in more than half of the other countries for which data were supplied. On average, whiplash claims in Switzerland cost ten times as much as in the UK; in the Netherlands, almost six times as much; in Norway, more than twice as much.
7.         It was only on the arguably less significant measure of whiplash claims as a percentage of bodily injury claims that the UK came top of the comparative rankings. Italy had many more bodily injury claims in total – and the overall cost of such claims in Italy, Germany, France and even Spain was higher than in the UK.
8.         The CEA data could in fact be used as the basis for a number of rival ‘compensation capital’ claims:

• ‘Italy and Germany are the motor claims capitals of Europe’, with respectively 4.7 million and 3.96 million motor claims per year, well ahead of the UK with 2.9 million claims per year.
• ‘Italy is the bodily injury claims capital of Europe’: 18% of all claims (846,000) are for bodily injury and their overall value is € 7.48 billion euros, ahead of Germany (€ 5.346 billion), France (€ 3.95 billion) and Spain (€ 2.199 billion). The UK ranks only in mid-table with an overall cost for bodily injury claims of € 2.159 billion (paid out in 493,000 claims, comprising 17% of all motor claims).
• ‘Italy is also the whiplash capital of Europe’, with 558,000 claims for minor cervical trauma (as compared with only 375,000 in the UK) at a total cost of € 2,393 (more than double the € 1,080 in the UK).
• Alternatively: ‘Switzerland is the whiplash capital of Europe’: the average cost per claim linked to cervical trauma is € 35,000, massively higher than the € 2,878 average reported for the UK – which was also behind the Netherlands (€ 16,500), Norway (€ 6,050) and Italy (€ 4,288) and perhaps other countries, like Spain, for which no data were available.

9.         Though the CEA Study is now rather dated, no subsequent study has collated data across the same range of measures. The ABI presented updated statistics to the House of Commons Transport Committee in 2013,[6] but these were only for the number of whiplash claims as a percentage of all bodily injury claims in 2013 and they ignored the other measures included in the CEA Study – including the overall number, overall cost and average cost of whiplash claims –in respect of which the UK came behind other countries in the comparative rankings. For only the UK and four other countries from the 2004 study did the ABI even supply data. Even on this new data, it could be said that the new ‘whiplash capital’ of Europe was not the UK but France, in which in the years since the CEA Study the number of whiplash claims (as a percentage of bodily injury claims) had risen to ten times what it had been before, while the corresponding rise in the UK was by only 2.6%. (Actually, the data reported for France are so extreme that they suggest deep methodological flaws in the data collection and analysis rather than a radical change in the claims landscape.)
10.     I draw the conclusion from this that the evidence in support of the claim that the UK is the ‘whiplash capital’ of Europe is lacking in substance, being based on flawed research from which data have been ‘cherry picked’ to support specific agendas in the public debate. Data that do not support the desired narrative are ignored or even suppressed.[7] Instead, whiplash claims are presented as especially prone to fraud or exaggeration, and the UK’s liability system as peculiarly susceptible to such conduct. Yet, though there have been specific instances in which fraudulent whiplash claims have indeed been exposed, there is a lack of reliable evidence as to extent of the problems of fraud and exaggeration, and a corresponding concern that – as with the ‘whiplash capital’ claim – unreliable data will be used as the basis of tendentious interventions in the public debate. This disregard for real evidence in turn raises the concern that reform will be driven by a desire to stop rare instances of abuse of the system, and thus to address a largely illusory or at least a more limited problem, while subordinating the interests of the majority of injured persons whose claims for compensation are entirely ‘genuine’.

31 March 2017