Problems since whiplash reforms raise concern over access to justice for genuine RTA claimants

In May 2021, the Government brought in a series of whiplash reforms aimed at reducing the number of exaggerated and fraudulent RTA (Road Traffic Accident) whiplash claims, which were, as a consequence, causing insurance premiums to rise.

One year on, there remains significant criticism of the introduced reforms, not only with respect to the level of fraudulent claims, which remains high, but of the OIC (Official Injury Claim) service introduced, the original intention of which was intended to empower claimants without formal legal representation or LiPs (Litigants in Person) to self-serve in pursuing their claims.

The new rules from May 2021 for RTA whiplash injuries

New fixed tariffs for RTA whiplash injuries increased the limit on these claims for the small claims track from £1,000 up to £5,000. There were also fixed levels of compensation introduced and where general damages for pain, injury and amenity fail to exceed the £5,000 small claims limit, legal costs are no longer recoverable.

Using the OIC claims portal

In addition to the fixed tariffs and increase in the amount for small claims, the OIC claims portal was brought in by the Government, with the intention of empowering LiPs to pursue and resolve their claim without the need for legal representation.

The OIC system, which operates through an online portal, administered by the Motor Insurers’ Bureau, expects claimants to follow a ‘how-to’ guide or navigate the system, without the need for a lawyer.

OIC portal described as a “cautious success” overstates the efficacy

Speaking at the recent  PI Futures conference in Manchester, David Parkin, Deputy Director of Civil Justice at the Ministry of Justice, claimed that the OIC system has been a “cautious success” adding that the system is easy enough to use if people chose to. But this is not the view widely shared by many professionals in the industry, and when 220 delegates at the conference were asked if they thought the system was going well, nobody raised their hand.

The OIC portal figures speak loud and clear

The most significant statistic of the OIC portal’s usage in the last year is that only 10% of the people using it are LiPs. And while there has been an overall reduction of 40% in RTA personal injury claims in the past year, it is widely accepted that this is mostly attributable to Covid, not the efficacy of the OIC system. Furthermore, Aviva reported for 2021, an insurance fraud increase of 13%, of which 60% were RTA-based, despite the whiplash reforms.

The portal is “a real cause for concern”

Industry professional, Sue Brown, Chair of the Motor Accident Solicitors Society, has termed the portal “a real cause for concern” with structural and operational inefficiencies resulting in thousands of unsettled claims now starting to clog the system. At the time of reporting, there were 185,000 active claims out of the 243,000 claims lodged since the system launched, with only 23,000 settled.

Obstacles to the OIC system

• A key obstacle to LiPs using the system is its complexity for making hybrid claims, where claimants report both whiplash, which is a compensation that is tariff-based, and other injuries, which are not. Claimants are advised in the guide to consider making a ‘valuation of their other injuries’, which has been seen by many as deterring claimant from progressing further.
• There have been detrimental effects on law firms who have stopped taking instructions on lower value claims, with some smaller firms relying on whiplash claims having to close completely.
• Although larger firms have fared better with the reforms, this has largely relied on their ability and willingness to invest in integrating the OIC system with their own online platforms, despite the smaller margins the reforms bring about. Adaptability has been key for these firms, and the availability of inhouse IT resource. For example:
• Slater and Gordon have integrated the system with MiPlatform, through which they plan on extending other legal services, still undertaking the legal work in pursuing claims for their customers.
• National Accident Law have reported a successful transition into the new processes, indicating that its customers were progressing quickly through the stages of the online portal, with medical reports being arranged, liability offers received, and an early settlement date anticipated. 

Overall negative effect for claimants going forward

The reforms result in lower damages for claimants and, alongside the complexity of navigating the portal alone, without legal representation, it seems clear that significant numbers of claimants will be dissuaded from pursuing their claims. This is a concern with regard to genuine claimants suffering injuries compounded by a resulting lack of access to rightful justice.

Further whiplash reforms on hold

It’s with some relief in the industry that further Government reforms for whiplash claims have been put on hold. Neil McKinley, President of the Association of Personal Injury Lawyers, said some of the measures were “unfair to claimants, the vast majority of whom are genuinely injured people”.

Assistance available for RTA clients

At Prosperity Insurance we can help to streamline the process for firms dealing with RTA claims by providing ATE insurance at competitive rates with fully deferred premiums, which may help to encourage injured parties to pursue claims.

We can also help to mitigate the risks involved in the litigation process, with each claim dealt with by a team of highly experienced lawyers and underwriters.

Law firms who need support for their clients or would like to find out how our products can help with RTA-related personal injury claims should contact us for more details at 0800 524 4235, or email info@prosperityinsurance.co.uk.