UK & Europe
For those who are fortunate, ongoing or recurring restrictions on movement will mean continuing to work from home and limitations on the social contact previously considered essential. There are those, however, for whom the restrictions on movement have had and will continue to have a considerable effect on their lives, despite the recent loosening of the lockdown measures. Catastrophically injured individuals are likely to have found their rehabilitation and treatment obstructed, with the consequent effects of delayed recovery impacting on their mental health.
It has been suggested that vulnerable elements of the population may find themselves subject to some measure of social restrictions for longer than other elements of the population. The vulnerable nature of catastrophically injured claimants makes it more likely that they are at higher risk of mortality from the virus itself, but also due to complications from their injuries or other infections.
In the event that these claimants are unaffected by the virus, there will be still be significant impacts on their recovery, and thus their claims.
Firstly, non-essential medical treatment has in most cases has been cancelled, including privately funded treatment. Even in the event of a return to previous levels of treatments, there will still continue to be a significant delay to recovery times from conditions. This extends the cycle times of claims as some claimants may be awaiting surgery, after which a final prognosis can be made.
Access to rehabilitation for seriously injured claimants has been hindered. Planned Initial Needs Assessments will have been postponed; therapies and interventions which have been cancelled will be restarted. However, there is the possibility that access to rehabilitation facilities may yet be hindered after the crisis. Scientists are as yet unclear on the full scope of the after-effects of COVID-19 but it is believed that many individuals who suffer and then recover from COVID-19, will require some form of rehabilitation, whether psychological or in the most severe cases, physical. This may place additional pressure on rehabilitation services, which were already at a premium. We will be keeping the epidemiological impact of Covid-19 under close consideration as it continues to develop.
The cost of care is also likely to increase in many instances. Carers from a claimant’s family may be required to self-isolate for periods, and therefore, any agency coverage is likely to be subject to a premium. In addition, the costs of professional care could spike further during the ongoing outbreak due to a number of issues such as staff absences and PPE limitations. Once the crisis has abated, it should be ensured that any increase in the costs of care seen is not perceived as the new normal.
The psychological impact of social distancing for catastrophically injured claimants will also impact on claims, such as those who live alone and rely on socialising with family and friends; or residents on in-patient units where visiting is being extremely restricted. Case managers will need to be acutely aware of this issue and seek to mitigate the risk.
Medico-legal consultations through virtual means are likely to remain in place well into the future, and are particularly advantageous where experts are located across the country. However, the prospect of remote Joint Settlement Meetings in the long-term will likely depend on whether parties view settlement as being as likely in a remote setting than a face to face meeting (socially distanced or otherwise).
Any deterioration of the economic position of the UK is likely to impact earnings potential and reduce employment prospects or increase unemployment risk for claimants. Reserves for future losses will consequently be affected. Insurers may wish to take these points when negotiating settlement of claims, whilst being mindful of any potentially negative PR issues in being perceived to profit from the pandemic.
As to settlement figures themselves, the Discount Rates in England, Wales and Scotland do not have to be reviewed for 4 years, in 2024, in line with the legislation requiring their assessment. We have no expectation that the rate will be reviewed any time in the near future; nor will there be an immediate and fundamental reconsideration of the Discount Rate to allow for the introduction of a dual rate. As part of the last review, the then-Lord Chancellor, did ask for assessments regarding the implementation of dual discount rate ahead of the next review.
Regarding the current rate, the negative discount rates across England, Wales and Scotland inevitably carries a greater attraction for claimants seeking a lump sum settlement; yet the volatility of the stock markets in the months and possibly years to come may nonetheless prompt a reconsideration of the use of PPOs in catastrophic injury claims.
Prior to the pandemic, it has been speculated that the judiciary could prompt an increase in the number of PPOs by enforcing their use in select cases, particularly in cases where the NHS are the defendant. It is possible that the current situation may present such an opportunity.
It is also arguable that the existing Ogden tables do not accurately reflect the risks following the pandemic and alternative evidence offering a more ‘realistic’ analysis of risk may be something to consider as forming part of the settlement consideration.
We will continue to review and revisit the issues addressed in this blog in the coming months.