Government data shows personal injury claims fell sharply in 2025, led by a steep drop in motor cases
The personal injury market has recorded its sharpest decline to date, with new figures revealing that claim volumes have collapsed to their lowest level on record. Data released by the Compensation Recovery Unit (CRU) confirms the sector is shrinking rapidly, sparking renewed accusations that the civil justice system is failing road traffic victims while insurers protect their bottom line.
Figures obtained by the Association of Consumer Support Organisations (ACSO) via a Freedom of Information request show a precipitous 24 per cent drop in motor injury claims in the final quarter of 2025 alone, falling to just 63,833. This stands comfortably as the lowest quarterly figure ever recorded.
The wider annual picture is equally stark. Throughout 2025, motor claims fell by 14 per cent to 282,428, down from 328,637 the previous year. The total number of personal injury claims across all categories also retreated, dropping 12 per cent to 413,323.
To understand the sheer scale of this market contraction, one must look back to 2018. In that year, the CRU recorded a massive 876,562 claims, with motor incidents accounting for over 667,000. Today, those volumes have effectively halved—a 53 per cent crash in total claims and a staggering 58 per cent fall in motor cases.
Industry experts pin this decline on the cumulative impact of the Civil Liability Act, now seven years post-Royal Assent, and the introduction of the online portal for lower-value claims five years ago. These reforms introduced strict tariffs that slashed compensation, forcing many law firms to close their personal injury books and leaving the market dominated by a small handful of volume players.
Matthew Maxwell Scott, executive director of ACSO, warned that the government’s narrative of a “compensation culture” is now dangerously misplaced.
‘Ministers and officials may claim this as a victory, but unless and until the considerable savings being made are being passed on to motorists through materially lower insurance premiums, it’s a win for insurers’ shareholders and them alone,’ said Maxwell Scott.
He argued that while roads remain dangerous and traffic has returned to pre-pandemic highs, the system has become hostile to claimants. ‘It is much harder to get yourself repaired than it is your vehicle,’ he noted, describing the government’s Motor Insurance Taskforce as a ‘damp squib’ for failing to address the widening gap between insurer savings and driver costs.
Beyond the volume collapse, lawyers are grappling with the chaotic implementation of the Fixed Recoverable Costs (FRC) extension introduced in 2023.
John McQuater, executive committee member of the Association of Personal Injury Lawyers (APIL), highlighted severe issues with the new intermediate track.
‘The whole point of FRCs is so the legal costs of a case can be predictable and assessed accurately,’ McQuater explained. ‘But with the uncertainty brought by the reforms, it can be hugely difficult for claimant lawyers to fully inform injured people, at the outset, about how costs will be dealt with.’
The government is currently reviewing key aspects of the whiplash regime, including the statutory definition of whiplash and a proposal to hike the small claims limit from £1,000 to £5,000. However, with “obvious problems” emerging in the complexity banding of cases, the legal sector faces a turbulent future where access to justice appears increasingly restricted.