Time for Independent Assessment of the Whiplash Reforms
Donna Scully | Owner/Director
As we move beyond the fifth anniversary of the introduction of the OICP, it is time for the Government to commission an independent, data driven assessment of the impact of the Whiplash Reforms, and to address the behaviours that continue to delay settlement.
Independent Review
The Reforms involved one of the biggest changes to the legal sector for decades, in terms of the number of individuals affected. The past five years have seen extensive commentary from claimant lawyers and compensators.
We now need an independent review to confirm the impact of the Reforms - positive and negative. This should cover the experience of a motorist who needs to pursue a claim, as well as the wider consequences. We have five years of data that can inform the assessment, which should be used to identify improvements.
The Portal was intended to deliver a streamlined service for quickly resolving claims, and the tariff was intended to simplify the valuation of whiplash claims and reduce disputes. These improvements were intended to allow injury claims to be successfully managed by individuals with no legal experience or training.
Have these aims been achieved? It seems not:
- Fewer than half of claims have been settled.
- We have previously provided to the MOJ data demonstrating that the OIC life-cycle was longer than for equivalent claims previously run on the MOJ.
- The quantification of injury claims was not simple - and has to be resolved by the Supreme Court.
- Despite the clarification provided by Rabot, we still have to run thousands of cases to court to ensure the right customer outcome - an objective close to the heart of all insurers.
- The reported number of litigants in person is both small and overstated.
The continued concerns need to be independently considered, and appropriate remedies identified.
Behaviours Delaying Settlement
Any independent observer would acknowledge that the Portal initially presented huge difficulties in advancing claims. The tech didn't work properly, and claims were stalled. It took several years for the system to gradually improve.
While the system issues have improved, we now face new challenges that result in genuine claimants being kept out of their damages as a result of the reforms. Despite the clarification on non-tariff injuries, we have to issue high numbers of claims due to remarkably low injury offers, that do not reflect Rabot. At the same time we see a high level of technical points being taken by defendant lawyers, in an effort to achieve savings.
We are required to issue proceedings to defeat these arguments and secure the right customer outcome. This places additional pressure on an already stretched Court Service, and adds further delay and expense. In Carpenters' experience at least, the arguments for lower awards or technical points almost always fail. We regularly recover several times the amount offered. That is not small beer for individual customers, and demonstrates the value of legal representation and the support of legal expenses insurance.
The MOJ should take action to address these unmeritorious arguments.
Insurers and their lawyers should of course be free to challenge any particular head loss, and to make low offers – even if the amount offered is patently below the minimum value of the claim.
Where however those strategies serve only to add unnecessary cost and delay to the process, and drain already limited court resources, there should be a consequence. There must be a mechanism to encourage settlement and deter litigation, which the current no-costs environment does not provide.
If the defendant’s best offer is beaten by, say, more than 20%, the defendant should pay a costs penalty. That should reduce the customer detriment that we continue to see as a result of arguments pursued by defendant lawyers. The same should apply to claimants, who should face a costs penalty if the amount awarded is below 80% of their offer. These changes would concentrate the parties’ minds, and encourage litigation to be conducted reasonably.
The MOJ should introduce measures to put an end to the continued misery faced by hundreds of thousands of consumers.
For further reading on this topic please see HERE.
