UK & Europe
Insurance & Reinsurance
The ever-changing landscape of the COVID-19 pandemic has sadly triggered many job losses and concerns about financial security. As was identified following the financial crisis of the late 2000s, fraudulent or exaggerated personal injury claims are often seen as an uncomplicated and victimless offence. It is no coincidence therefore that insurers are already beginning to see an increase in all types of ‘late notified claims’.
Whilst insurers have different thresholds for what is considered a 'late' claim, in effect these can be defined as claims received a considerable period after the alleged incident first occurred, but within the three year limitation period for personal injury.
Such 'late' claims may be either entirely new claims; previously submitted claims which have been challenged or repudiated; or claims which had appeared to have been abandoned.
The likelihood is that the deteriorating financial climate, coupled with lockdown, furlough and redundancies will no doubt have given some claimants more time to reflect on whether a potential claim is now worth pursuing. In addition, they will likely be persuaded as such by cold calls, texts and emails which may previously have been ignored.
In addition, Claimant firms will be subject to their own pressures. As we have seen consistently noted since the first nationwide lockdown commenced in March 2020, there have been significant reductions to Claims Notification Forms (CNFs) issued in the Claims Portal as compared to previous years. This is due to the impact of lockdown on both incidents giving rise to claims and also the ability of claimant representatives to obtain new instructions. Therefore, in these challenging circumstances, claimant representatives are likely to have been reviewing their caseloads to identify possible claims where a CNF has not previously been submitted, such as:
In addition, insurers may also see claims resurfacing where a CNF was submitted but the claim was repudiated, whether with the same firm of solicitors or where a claimant has referred the claim to a new firm. A resubmission such as this may hope to avoid detection by the insurer, again to take advantage of any capacity challenges presented by the pandemic.
The issue of late notified claims was discussed in 2015 in the Personal Injury Sub Group to the Insurance Fraud Taskforce. It was specifically identified that these types of claim often have a lack of objective evidence of injury, as the medical evidence is wholly reliant on the claimant reporting their history. The continuing permission from MedCo approving remote medical examinations adds to this risk factor. Remote examinations reduce the burden on a claimant, in particular for those claims where a soft tissue (or other) injury alleged may have completely resolved by the time of the examination, and cannot be independently verified by medical records.
Responding to late notified claims
Any late notified claim requires as much investigation and scrutiny as all other claims, if not more so.
A robust defence, pressure to disclose documentation to support any claim such as medical and employment records may well deter any claimants from proceeding with their claim.
Where a CNF has been issued previously and repudiated, insurers should take a firm stance by advising the new (or existing) firm that the claim has previously been repudiated and the insurer is happy to proceed to a final hearing where necessary. This may give some claimants pause for thought and lessen the likelihood of the claim dropping out of the portal and being pursued via litigation.
Late notified claims also carry the significant risk of action without instruction. There have been occurrences in which claimant representatives have progressed claims without full instructions. Where limitation is a factor, insurers should mindful of the possibility of claims where ‘pre-emptive’ action in issuing the CNF without instruction may have been taken. Insurers should always seek an appropriate form of authority signed by the claimant where lack of instruction is suspected.
In addition, appropriate intelligence investigations remain vitally important. Claimants may have had more time on their hands to browse and post during lockdown. Social media platforms and increasingly applications that detail a Claimant's exercise activity should be reviewed for posts around the time of the accident, as well as during the alleged prognosis. These searches may also indicate whether the claimant is in a precarious financial situation.
Irrespective of the pandemic, the impending whiplash reforms due in April 2021 had been expected to bring about an increase in the number of late reported claims. Those solicitors looking to exit the low value road traffic personal injury claims market may be looking to conclude any potential motor injury claims on their books with the promise of higher damages for claimants, coupled with more generous costs awards for themselves.
Within the Personal Injury Sub Group in 2015, it was noted that evidence suggested there were increased numbers of late claims advanced around the time of the LASPO reforms in 2013, possibly for the same reasons set out above. Any increase that may have been expected in advance of April 2021 has likely been mitigated by the impact of the pandemic.
The response of the Ministry of Justice to Part 2 of the Whiplash Reform Consultation has been outstanding for some time, there is no indication that the issue of late notified claims will form part of any further proposals. However, insurers will continue to be mindful of the specific issues posed by late notified claims.
Insurers need to remain vigilant and continue to implement a tough approach to any suspected late notified claims. Setting out their challenge to these claims out early may discourage claimants from continuing to pursue a late or reactivated claim.