Alan Hayes featured in the UK Motor Claims and Body Repair Report 2023-2024

Our Chief Legal Officer, Alan Hayes, spoke to Trend Tracker with an Official Injury Claim Portal update.

‘In last year ‘s Trend Tracker Report, Carpenters Group discussed the Official Injury Claim Portal (“OICP “), and in particular how it had adversely affected individual claimants.

A year on, the problems in pursuing claims have created a different and more long-term impact on access to justice, a reduction in the availability of legal advice. ‘

A Shrinking Market

CRU stats tell us that there has been a reduction in the number of motor injury claims.  There is no evidence to show whether this results from a change in claimant behaviour, or results from the reduction in available legal support and the process being too complex for individuals to run their own claims.

The reality is that the drop in claims will result from a combination of all factors, meaning that the reduction in legal support - and the complexity faced by litigants in person - has led to genuine claims not being pursued.

The problems in progressing claims through the OICP have caused significant difficulties for law firms, meaning that for many it is no longer financially viable to support injured motorists.  As a result, there has been a reduction in the number of firms offering these services.  Many firms, including some alternative business structures, have been forced to exit the market.

A recent survey of 113 law firms by First4Lawyers, showed that 53% of firms had stopped running motor injury claims as a result of the reforms.  Of those that remained, only one said that small claims were profitable as a standalone proposition. 

For the rest, small claims are run as a loss leader in order to secure claims outside the small claims track, which remain profitable.  Any claim run as a loss leader must give rise to a concern as to the level of service that will be provided to that loss making customer.

It is possible, if challenging, to run OICP and small claims profitably, while continuing to provide a high-level of customer service.  In order to do so, we need a Portal that works, and the law firm must have an efficient and fully integrated process.  Sadly, the absence of adequate systems has led to the downfall of a number of legal providers.  Given the tiny proportion of genuinely unrepresented claimants, it is vital that legal sector can continue to support individuals.

Justice Select Committee

The difficulties that have caused law firms to exit the market were reflected in the recent JSC report.

The JSC produced a balanced report, having considered feedback on the process from claimant and defendant lawyers, the Judiciary and insurers.   As a result of this feedback, the JSC raised various concerns and the MOJ was required to formally respond with an indication of the intended remedial action.

The MOJ’s response was disappointing; in summary, the system has broadly worked well and successfully delivered a platform for the management of injury claims.  The concerns raised were in specific areas.

Lifecycles – Comparison to the MOJ Portal

The JSC asked the MOJ to investigate the growing number of unresolved cases, and the increase in lifecycles.  The MOJ disputes that claim progression is deteriorating and argues that the data is misleading due to the high number of dormant and abandoned cases. 

A claim may be dormant while the claimant “waits out” the prognosis or may have been abandoned following a liability denial but not removed from the system.

This response does not address the concerns of the JSC.  The MOJ was specifically asked to make a direct comparison against claims progressed on the MOJ Portal.  While the MOJ has said that additional data will be published from January 2024 by MIB, it is not clear that this will be the direct comparison data requested.   The response suggests that the additional data will relate to the status of cases on the OICP, rather provide than a direct comparison with similar claims on the MOJ Portal.

A direct comparison should be easily achievable by looking at lifecycles of OICP claims with liability admitted, and MOJ Claims.  It will be disappointing if the MOJ ignores the JSC’s request for a direct comparison.

Technical Issues

The MOJ’s refusal to acknowledge the deterioration in claims progression means that it does not need to address the technical issues that have caused delay.  In relation to the significant problems faced by professional users, the MOJ cites the challenges faced by the OICP in having to integrate with numerous different platforms and case management systems.  This response overlooks the fact that the MOJ Portal is successfully integrated with exactly the same systems and has made 7 change releases in 14 years, without the significant difficulties presented by the OICP, which has provided 31 releases within the first 3 years.  The failure to replicate MOJ portal integration reflects a significant failing on behalf of the OICP that has led to the delay of tens of thousands of claims, and the potential of abandonment of genuine claims out of sheer frustration.  This failure is completely ignored in the response.

Instead, the MOJ states that required changes are now “quality of life” improvements rather than bug fixes, and the next release is not due until Q3 2024. 

Stakeholder Engagement

The MOJ claims to engage with stakeholders, and cites the sessions hosted by the MIB last summer.   The response fails to mention that those sessions produced multiple recommendations for improvements, from both claimants and defendants, most of which the MOJ rejected. 

Stakeholders could be forgiven for wondering whether the time they devoted to those sessions was well spent.  The refusal to support most of the suggested changes may deter participants from devoting time and cost to future sessions.

Litigants-in-Person

Much of the JSC report and the MOJ response relates to unrepresented claimants (litigants-in-person “LIPs”), and their apparently different claims experience when compared to represented parties.

Initial Projection

The MOJ claims that 10% of claimants are unrepresented.  This figure is one-third of expectation.  The real figure for individuals running their own claims is likely to be closer to 3%.  In response to the suggestion that the proportion of LIPs is below the initially expected rate of 30%, the MOJ state:

• The 30% figure was provided by claimants and the judiciary.
• It was an assumption, not a target

It is not clear which claimant representatives believed that 30% of individuals would choose to run their own case.  That was not the view of Carpenters, nor of any other claimant representative with whom we discussed the reforms.  Carpenters Group is the biggest claimant representative in the UK. 

Our response to the consultation on the reforms stated that it was entirely unrealistic to expect individuals to run their own claims and requiring them to do so would mean that genuine claims would not be pursued.

The MOJ seeks credit for the increased number of LIPs, while at the same time dismissing the failure to reach 30% by claiming that increasing the number of LIPs was never an objective.

• In the covering letter to the response, Lord Bellamy states “OIC see was implemented to provide a greater choice, and the 67,000 claimants who have chosen to bring their own claims – compared to virtually non-pre-reform – is testament to this great choice.”
• The response states “. . . the OIC system has also provided greater claimant choice in how to take forward their claim and this is demonstrated by the fact that the service has enabled over 67,000 claimants to represent themselves and progress their claims “.

The MOJ attempts to take credit for offering greater choice, while at the same time, stating that -

“. . . the MOJ has not set any targets for increasing the number and proportion of unrepresented claimants, and this has never been an objective of the whiplash reform program.” 

The MOJ’s response provides is contradictory.  It is hard to understand the intention of the OICP, if not to allow LIPs to bring their own claims.  (Represented claimants had an existing Portal that worked perfectly well.)  Deciding with hindsight that an LIP rate of 30% was an assumption and not a target is a device to conceal the failures in the system.  It is not being used by anywhere near the expected number of unrepresented individuals.

Stretching Interpretation

Even at 10%, the proportion of unrepresented claimants is overstated.

The data suggests that 10% of claimants are unrepresented.  The MOJ acknowledges that this figure is disputed, with claimant and defendant representatives arguing that assistance on the majority of these claims is provided by fault insurer.

Again, the MOJ is applying an interpretation that supports its contention that all is well with the process.  It states that claimants are “unrepresented” if they are assisted by a friend, colleague, teacher, or the fault insurer. 

Where a claimant is assisted by the fault insurer, that assistance is clearly provided by a claim’s professional - and a non-independent one at that.  To suggest the individual is running the claim themselves is denying the provision of professional support, in order to contend that the system has delivered an option for individuals to run their own claims.

The MOJ concludes that the number of unrepresented claimants is not “a point of concern”.  This assertion directly conflicts with the intention of the OICP.   It was built to allow unrepresented claimants to bring their own claim, because they needed a mechanism to do so following the withdrawal of legal funding.  The use of the system by individuals was central to this very expensive project. 

In claiming that the 30% was an assumption rather than a target, and that “unrepresented” litigants-in-person include individuals being advised by claim professionals, the MOJ is painting the target around the arrow.

Worse still, insisting that represented claimants must use the new system, rather than the MOJ Portal that works perfectly well, has caused significant delay to tens of thousands of represented claims.

Incomplete Data

The MOJ points to data to support its contentions, while not recognising the underlying factors behind that data.  It states that:

1. 10% of claimants are LIPs.
2. The liability to first offer stage is much quicker for LIPs.
3. LIPs settle their claims in half the time of represented claimants, but at the same amounts.

However, the data supports an entirely different story.

The true number of LIPs.  The MOJ does not know the proportion of claimants that are assisted by the paying insurer, because it does not measure this number.  It says that all unrepresented claimants are sent a questionnaire, and that research has been undertaken by Ipsos Mori.  Enquiries could be added as to whether assistance was received from a third party, and if so whom.  Carpenters made this suggestion two years ago.  The MOJ chooses either not to obtain or not to reveal this data, which is likely to be inconsistent with its narrative.

Time from liability decision to offer.  The time from liability decision to offer on unrepresented claims is 74 days, compared to 217 days for represented claimants.  The MOJ says that consideration is being given to the cause of this discrepancy, while at the same time ignoring the obvious explanation – which is the different profile of claims under insurer third party assistance schemes.

Liability on all of these claims is admitted, and the claimant’s advisor is acting on both sides, so the process will inevitable be quicker.  To refuse to identify the extent of that practice, and then imply that the results demonstrate better outcomes for unrepresented claimants, presents a false impression. 

LIP Settlement Values. The MOJ’s approach produces a potentially dangerous misunderstanding of the data.  The response says that that lifecycles for unrepresented claimants are approximately half those for represented claimants (167 v 327 days), whereas settlement values are the same.  It uses this data to assert that:

“. . . unrepresented claimants are not suffering any negative access to justice issues in respective settlements.”

That is not an assertion that can be reliably made.  The data shows the settlement amount.  It does not show the value of the claim and whether the settlement was appropriate.  Nor does it track where claims originally submitted within the OICP settle as many will drop out and move to Claims Portal due to their value. 

There is a risk that unrepresented claims are settling too quickly and at an undervalue - without legal support and based on advice from the paying party.

Cost

There is a lack of visibility about current and ongoing costs, not helped by the absence of a governance structure similar to that operated by CPL.  As at March 2023 the ABI’s figure for the cost of building the new Portal was put at £30m.  That figure will now be significantly higher.

The reality is that individuals are not using the OICP to run their own claims, with a true LIP rate of 3%, and that the new Portal was not needed for represented claims – the existing Claims Portal worked well.  Given the huge spend, it is perhaps not surprising that the MOJ is using interpretation and incomplete data to suggest the process has been a success.

Insurers are as keen to progress claims as all other stakeholders.  The cost of the process must be a concern for insurers, given that the main impact of the new Portal has been to delay claims. 

The Future

The well-documented problems with the OICP, as highlighted by the JSC, have contributed to law firms leaving this sector.  While this contraction in the legal market is obviously disappointing for those have been forced to exit the market, it provides exciting of opportunities for those of us who remain, Carpenters has invested the time and money required to automate and integrate the new Portal into our system.  If you do not make it fully A2A, it is just not cost effective to run claims, obtain MI or provide proper customer service.

Credit: https://www.trendtracker.co.uk