Motor - market insights April 2025

Review of the Whiplash Injury Regulations published

On 21 November 2024 the ‘Lord Chancellor’s Report and Recommendations’ following the statutory review of the Whiplash Injury Regulations 2021 (Regulations) was published and presented to Parliament.

The current structure and component parts of the whiplash tariff are to be maintained. Tariff figures in each band are to be increased by 14-15% (accounting for CPI inflation between 2021 and 2024 and building in a three-year buffer). The provision of further guidance to assist in the definition of minor psychological injuries is to be explored. Where the claimant has evidenced exceptional injury or circumstances, the maximum uplift will be maintained at up to 20%.

The level of increase to the tariff was lower than a number of commentators had expected and was met with cautious approval from compensators.

Having consulted on those decisions with the Lady Chief Justice, a statement made by the Minister of State for Justice confirmed the laying of the draft Whiplash Injury (Amendment) Regulations 2025 before Parliament on 20 March 2025. Subject to the Regulations being approved by both Houses, the Regulations will increase the tariff for whiplash injuries occurring on or after 31 May 2025. The statement adds that the “original whiplash tariff will continue to apply to relevant whiplash injuries from road traffic accidents that occur before 31 May 2025.”

Revisions to the medical reporting process in RTA claims up to £5,000

On 16 December 2024, the Government Response to the call for evidence on revisions to the medical reporting process for road traffic accident claims was published. Among the next steps to be taken by the Ministry of Justice are:

• Increasing the fixed cost medical report levels (as set out in the Response), with associated rule changes and new figures to be consulted on prior to implementation.
• Working with MedCo to review and refine the MedCo Accreditation process and training. The objective being to improve compliance with the relevant pre-action protocols and quality of MedCo medical reports generally.

Motor insurance taskforce

On 16 October 2024, the UK Government established a new cross-government motor insurance taskforce supported by industry experts – including insurers, motoring groups, consumer groups and regulators - to help identify and understand factors contributing to rising premiums.

Alongside this the taskforce will agree solutions aimed at keeping costs under control. 

Credit hire: new General Terms of Agreement

In November last year a revised General Terms of Agreement (GTA) was announced, with changes effective from 1 March 2025.  The revisions introduce four key initiatives, aimed at reducing and where possible removing frictional costs.

The changes introduce an independent vehicle hire rate review to be conducted annually and driven by market data, and new late payment penalties. In addition, it is anticipated that a compulsory arbitration process where the claim is not agreed and settled within a set period will help in minimising friction. Alongside this, rules on areas of argument/dispute in the arbitration process have been made clearer.

E-scooters: future legislation?

In November last year, the then Secretary of State for Transport, indicated that whilst the Government would look to introduce regulation on e-scooters, there would be insufficient time to do so in this parliamentary session.

It would appear that any proposed legislation to regulate the use of e-scooters is unlikely to be introduced until after the summer. 

E-scooter rental trials, which have been subject to several extensions by the Department for Transport, are currently due to conclude on 31 May 2026.

CCAV launch Automated Vehicles Act implementation programme

On 26 February 2025 the Centre for Connected and Autonomous Vehicles (CCAV) published guidance on the Automated Vehicles Act Implementation Programme which was launched last year.

The programme is being delivered on a joint basis by the CCAV, Department for Transport, Department for Business and Trade, Driver and Vehicle Standards Agency, Driver and Vehicle Licencing Agency, Vehicle Certification Agency, and National Highways.

The objectives which cover deployment, in-use regulation, and building capability include the production of secondary legislation and guidance necessary for establishing the regulatory framework.

Further details of the anticipated programme for secondary legislation, including new consultations, are awaited.

Automated vehicles: Department for Transport (DfT) publish research findings on regaining situational awareness

In January 2025, the DfT published a report following research into the implications of non-driving related activities (NDRAs) in vehicles that have self-driving capabilities.

Among the key findings in the ‘Regaining Situational Awareness as a User in Charge: Responding to transition demands in automated vehicles’ report is the need for the mechanisms applied in measuring situational awareness to be refined. Alongside this is the need for appropriate thresholds for safe takeovers, with the importance of the driver (or user-in-charge) being given clear and specific instructions highlighted to be established.

Case developments

Case heard by the Supreme Court of Ireland raises question on the scope of the mandatory motor insurance obligation  

Urban and Rural Recycling Ltd & RSA v Zurich [10.10.24]  

The Supreme Court held that the liability of a recycling company to an employee who suffered life-changing injuries while loading a wheelie bin onto a recycling truck was a liability that was required to be covered by the company’s compulsory motor insurance policy rather than its employer’s liability policy. The case raised issues about the scope of the mandatory motor insurance obligation, the proper interpretation of a 2009 EU Motor Insurance Directive and Ireland’s compliance with EU law in this area. Judge Murray commented: “a complete and coherent legislative overhaul of the compulsory motor insurance obligation is long overdue.”

We also discuss this case in the travel market insights.