UK & Europe
Insurance & Reinsurance
The expected implementation of the whiplash reforms in April moves ever closer into view, barring a further as-yet unforeseen delay. Once the reforms are introduced, it is inevitable that proposals will be made for further modification of how low value personal injury claims are handled.
The recent publication of a report by the Civil Justice Council working group on low value injury claims gives an indication on where the future battlegrounds for reform are likely to be fought. The report sets out those areas of consensus across the group, but notes a lack of agreement on many issues, particularly between claimant and defendant representatives.
The report makes clear that the group was of the opinion that the conclusion of the whiplash reforms should prompt “a period of stability until any further substantive reforms are introduced”. Therefore, it is possible any of the proposals advanced within the report may not be implemented, or discussed further in any significant detail for the next year.
It should also not be forgotten that responses from the Government are expected in the near future on the proposed extension of the fixed recoverable costs regime, and also on part two of the ‘Reforming the soft tissue injury (“whiplash”) claims process’ consultation. Part two has been outstanding for some time, and will cover issues such as credit hire and rehabilitation.
A full copy of the report can be found here.
Basis of the report
The CJC was asked to “consider and recommend what further reforms could be introduced for low value (under £25k) personal injury claims, with a view to (i) resolving meritorious claims more quickly and with the costs reduced and (ii) preventing unmeritorious claims”. The term ‘unmeritorious claims’ was deemed to include claims where an objective solicitor would regard the claim as having no prospects of success, as well as both fraudulent and dishonest claims.
The report covers these areas as well as some additional issues such as support for claimant, regulation and costs shifting, all of which are relevant to the issues for the report to address.
Resolving meritorious claims
Areas of consensus
Whilst there is no intention to link the Official Injury Claim (OIC) Portal and the existing Claims Portal at this time, the group recommended that this should be an area of priority with data automatically transferred between portals should a claim move between the two.
The lack of effective support for credit claims of all types (hire, repair, rehabilitation) within the OIC will result in claimants having to bring small claims proceedings, tying up court resources and requiring more District Judges.
The lack of clarity for litigants in person on how to value damages (particularly tariff and non-tariff injuries) in the portal needs to be resolved. Similarly the removal of the proposed ADR facility from within the OIC portal is likely to prompt a similar increase in litigation at the small claims level.
Areas of dispute
Defendant representatives were concerned about claims incubation and claims layering causing delays. This was disputed by other group members on the basis that there is no incentive to delay claims. Proposed time limits on notification of claims to defendants (different to limitation) were also objected to on the basis that this could impede access to justice.
Whilst the group was supportive of ADR, there was disagreement of whether or not there are sufficient resources to increase the use of ADR.
Prevention of unmeritorious claims
Areas of consensus
The introduction of an overarching body to monitor data, and a single database to facilitate identification of insurance fraud should be a priority. Claimant identities should be verified by an askCUE PI check or, in the alternative, the Government Verification Identification Check System.
Awareness of the risk of insurance fraud should be directed at consumers, specifically that it is not a victimless crime, with the publication of appropriate data from both the Claims Portal and OIC Portal to support that. Claimants should also be made aware of the significance of signing a statement of truth.
Areas of dispute
Some members argued that a full assessment of the extent of fraud must precede any further reforms aimed at preventing it.
The group agreed that the 'prefer not to say' option in response to the referral source on Claims Notification Forms was being used regularly, yet disagreed on whether a sanction should be placed on those who do not provide that information.
The group agreed that the OIC should work with the Financial Conduct Authority to ensure that claims management companies ("CMCs") do not take advantage of vulnerable litigants, with the entrance of CMCs into other markets – such as COVID-19 claims – monitored closely.
The group could not agree in whether there should be a cap on CMC fees, or transparency as opposed to a limit would be more appropriate.
A blanket ban on cold-calling was supported. In respect of medical reporting, there was consensus that MedCo should publish data on frequency and nature of abuses. However, there was disagreement over the proposed extension of MedCo to cover more claims.
The group agreed that the quality of medical reports could be affected by medical agencies taking a substantial cut of the fee, leading to a lower quality of report. Consequently, some members of the group argued, in order to make medical reporting financially worthwhile, the experts must see a large number of claimants in a short period, creating the aforementioned risk of lower quality reports.
The group expressed concern over claims discontinuing when the listing fee becomes payable, as this is a direct consequence of QOCS protection. However, the group disagreed on how to prevent this. Some members argued for an amendment to the rules providing for an enforceable costs orders should a claim be discontinued less than 28 days before trial. However, others felt the existing rules are sufficient, given that defendants can apply for a finding of fundamental dishonesty, set the discontinuance aside and run to trial where there is a late discontinuance.
Some members sought greater clarification on the principle and definition of fundamental dishonesty and when it can be used, but others strongly oppose any change and note there is no call for greater clarification from the judiciary. Disagreement also occurred as to whether guidance is required on "substantial injustice" pursuant to Section 57 of the Criminal Justice and Court Act. Others in the group argued guidance should be provided by judicial precedent.