Last amended by Personal injury discount rate review (Damages Act 1996 Sch A1, as inserted by s.10) in 2025. The second statutory review under the mechanism created by Part 2 set the discount rate for England & Wales at +0.5%, effective 11 January 2025 (previously −0.25% from August 2019).
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Civil Liability Act 2018 reformed two areas of personal injury law in England & Wales. Part 1 addresses whiplash claims arising from road traffic accidents: it defines 'whiplash injury' (soft tissue injury of the neck, back or shoulder suffered in a motor vehicle accident, with an injury duration of up to two years), requires damages for pain, suffering and loss of amenity to be fixed by a tariff set in regulations made by the Lord Chancellor (implemented by the Whiplash Injury Regulations 2021 from 31 May 2021, alongside the Official Injury Claim portal), permits an uplift in exceptional circumstances, and bans settling whiplash claims before a medical report is obtained. Part 2 replaced the mechanism for setting the personal injury discount rate applied to lump-sum damages, inserting a new framework into the Damages Act 1996 requiring periodic reviews on the basis of 'low risk' rather than 'very low risk' investment assumptions; under that framework the rate was set at minus 0.25% in 2019 and revised to plus 0.5% with effect from 11 January 2025.
Key Points
- Defines 'whiplash injury' as a soft tissue injury in the neck, back or shoulder suffered in a road traffic accident as a driver or passenger of a motor vehicle, where the injury lasts (or is expected to last) no more than two years (s.1)
- Damages for pain, suffering and loss of amenity for whiplash injuries are fixed by a tariff in regulations made by the Lord Chancellor (s.3); implemented by the Whiplash Injury Regulations 2021
- Courts may uplift tariff damages in exceptional circumstances, subject to regulations (s.5)
- Regulated persons are prohibited from settling or offering to settle whiplash claims without a medical report (ss.6–7), enforced through FCA regulation (s.8)
- Lord Chancellor must review the whiplash tariff regulations at intervals (s.4)
- Part 2 (s.10) substituted a new s.A1 and Schedule A1 into the Damages Act 1996, requiring the personal injury discount rate to be reviewed promptly and then at least every five years, set by reference to a diversified low-risk investing claimant
- First review under the new mechanism set the rate at −0.25% (August 2019); the second review set +0.5% effective 11 January 2025
- legislation.gov.uk records no outstanding effects — the Act is fully in force as enacted
Amendments History
2021 — Whiplash Injury Regulations 2021 (SI 2021/642)
Made under s.3: set the whiplash tariff (from £240 to £4,215 depending on duration and psychological element) with effect from 31 May 2021, when the Official Injury Claim portal and the £5,000 small claims track limit for RTA personal injury also commenced.
2025 — Personal injury discount rate review (Damages Act 1996 Sch A1, as inserted by s.10)
The second statutory review under the mechanism created by Part 2 set the discount rate for England & Wales at +0.5%, effective 11 January 2025 (previously −0.25% from August 2019).