Road to recovery

While rehabilitation reduces compensation bills and benefits both employers and the government, more independent providers could improve the system, reports Lucy Trevelyan

In personal injury circles, rehabilitation – where insurers agree to treat claimants very early on in the claims process, and so reduce the amount of treatment and incapacity payments needed overall – is the new buzzword.


Allan Gore QC, the new president of the Association of Personal Injury lawyers (APIL), called on insurers to embrace the concept more fully earlier this month (see [2005] Gazette, 5 May 3).

Rehabilitation companies that specialise in treating injured people and massaging them into shape and back into the workforce are springing up in droves, and insurers – previously suspicious of the concept – are more willing to give rehabilitation a try. Its rising use is no doubt partly because of the requirement in the pre-action personal injury protocol that both parties in an injury claim consider rehabilitation at the earliest opportunity.


The government has also cottoned on to the benefits, with Mansell Aylward, chief medical officer at the Department for Work and Pensions, pledging to take rehabilitation forward. A cross-departmental report examining how access to early rehabilitation can be improved is also expected.


Mr Gore says early rehabilitation creates a situation where ‘everyone’s a winner’. APIL launched a practice guide on the subject last year, which provides guidance on how best to deal with the rehabilitation of clients. He says: ‘Early rehabilitation is in the interests of the insurers because it reduces the compensation bill, it’s in the interests of employers because it returns employees to work, and it’s in the interests of the government because it reduces the costs of long-term care and reduces benefits outlay.’


Richard Crabtree, a partner at Pannone & Partners in Manchester, says that although it is widely recognised among stakeholders that early intervention usually allows the best recovery for an individual, it is not used enough in the UK, despite the obvious benefits.


Rehabilitation, he says, includes physiotherapy, brain injury/spinal rehabilitation in cases of catastrophic injury, assistance with care, aids and appliances, vocational rehabilitation, and so on – basically all steps to improve the condition of the claimants and help them get back into employment.


He says: ‘There is a lack of credible providers. Despite agreement between the ABI [Association of British Insurers] and APIL in the rehabilitation code, there has been a tendency for rehabilitation only to be considered where liability is clear cut, or for rehabilitation to be adversarial with one party – normally insurers – only agreeing to provide rehabilitation through named providers.


‘Adversarial rehabilitation is not in anyone’s interests as it does not assist the claimant and the improvement of their condition. Unfortunately, some insurers will only agree to rehabilitation on their terms.’


The problem with rehabilitation that is controlled by insurers is that claimants who do not complete the programme can find themselves penalised by the insurers for failing to mitigate their loss.


Mr Crabtree says: ‘I do not think that forcing anyone to undertake rehabilitation is of assistance. Forcing people into this will not ensure their co-operation. Insurers seem to be pushing in this general direction. Ideally, rehabilitation should be provided through an independent provider best suited to the claimant’s needs. I would maintain that it should always be on a voluntary basis; compulsion is not an option.’


More independent providers that do what clients require without being tied to either side are what are really needed, Mr Crabtree says. ‘The basic problem in the UK is one of trust, particularly at the higher level such as in brain/spinal injury cases. What is normally required is access to a rehabilitation centre. Again, defendant insurers are not particularly agreeable to this approach, as it is often open-ended with a large financial commitment. Usage has increased but there is still a long way to go. Education of both claimants and defendants is required.’


John Crawford, development director at rehabilitation provider, Proclaim CARE – winner of the award for rehabilitation at this year’s British Insurance Awards – says: ‘Adversarial [proceedings] and rehabilitation can be in conflict and do not sit together.


‘The government is rightly trying to ensure co-operation, openness and a more speedy resolution for the benefit of the injured party. Companies that carry out medico-legal reports by accepting instructions from one party must create a conflict, and for this reason Proclaim CARE does not get involved in them. We are totally independent but work for most major insurers.’


Helen Merfield, managing director of Health & Care Management Limited (HCML), says her firm is also totally independent – and admits the medical staff at her previous company used to have regular run-ins with insurers at their parent company.


‘We used to have battles with our parent company but we would never have compromised our professional standards. You have to care for the injured person and make them the centre of the process. Occasionally, medical people disagree with insurance people. The insurance industry does tend to see malingerers where actually it could be someone who has had a rough deal on the NHS.’


Nick Homer, product manager for income protection at Norwich Union Healthcare, says: ‘We have no formal links with any one rehabilitation company, though there are a select few providers we use. If we need to give someone an occupational health assessment, we use an independent company – that goes down better with clients. They don’t want a Norwich Union person talking to them about going back to work.’


He says the industry has got somewhat ‘carried away’ with rehabilitation and his firm would only use it when it is ‘relevant’.


‘We would only use rehabilitation where the client is well motivated and when it would make a difference. Some people may be being looked after perfectly adequately on the NHS. But if they needed a hip replacement before they could go back to work and there was a two-year waiting list on the NHS, for example, it would make sense for us to fund this privately.’


He adds: ‘There is always a commercial aspect to this for us. Rehabilitation is something we may do as part of the claims management – we don’t contract to it. If there is a material benefit, we will do it, but if you have got a 63-year-old man on £200 per month benefit, we are not going to fund intensive rehabilitation for that; the benefits would not outweigh the outlay.’


Nicola McLoughlin, a partner at Keoghs in Bolton who sits on the Forum of Insurance Lawyers (FOIL) special interest group for rehabilitation, says the UK performs badly compared to other countries. In the UK, a paraplegic has a 14% chance of returning to work, compared with 32% in the US and 50% in Scandinavia.


One reason for this poor performance, she surmises, is that the compensation system was focused on money – but there has been a change of attitude of late.


‘FOIL and APIL both champion the use of rehab. One of the biggest barriers has been lack of trust between claimant and defendant lawyers, so this was certainly an area to attack,’ McLoughlin adds.


‘The introduction of rehab into the protocol means the case-managing judiciary can be expected to ask whether rehab has been put in place and if not why not. [The Master of the Rolls] Lord Phillips is a strong proponent and has arranged for the Civil Justice Council to look at how to develop rehab in the civil justice system.’


She says the ABI report – Cost and Benefits of Return to Work and Vocational Rehabilitation in the UK – shows that rehab carries a cost benefit that should influence insurers.


The government initiatives, she says, are welcome but a more proactive approach is required. ‘We need a joined-up approach that government can pull together. Tax incentives could encourage employers who actively promote rehab. NHS resources should be the first port of call in a non-fault-based system as they are often involved before any idea of a claim has arisen. There should be a scheme to encourage GPs to access NHS rehab resources rather than to keep writing sick notes. There is a win here for government if people can be helped back to work and off benefits.’


Mr Gore says one of the barriers to a wider use of rehabilitation is that insurers are loath to invest in it unless liability has been established. This could take months, by which time the benefits of early rehabilitation will have been missed. The problem with this, he says, is insurers are also often loath to admit liability too.


‘We would like a code of practice developed which will mean liability is addressed more quickly. We did some research among our members in a completely different context which nonetheless investigated this as an issue and it threw up some interesting findings.’ The research revealed that in claims up to £5,000 where compensation was ultimately paid by the insurers, early liability was only admitted in 37% of cases.


He says: ‘If insurers argue that they should not meet the cost of early rehabilitation cases through interim payments because liability is not dealt with, then this begs the question that if they are paying compensation in such a large majority of cases, why can’t liability be admitted and dealt with earlier to give access to rehabilitation?’


He says he does not know whether insurers’ common refusal to admit liability is a deliberate strategy or the result of an administrative regime, but either way ‘it seems to be anomalous’.


Mr Gore says that since insurers are going to have to pay compensation in most cases, and given that early rehabilitation can be so beneficial and reduce the overall cost to them, it would be in their interest to fund early rehabilitation even where liability has not been established.


‘Early rehabilitation would reduce the bill overall and that would make up for the tiny handful of cases where no compensation is actually awarded. Insurers are liable to pay in the overwhelming majority of cases and the reason for that is that no-win, no-fee funding arrangements are a powerful incentive not to run spurious claims.’


Ms Merfield, whose firm derives most of its income from insurance companies, agrees. She says: ‘Insurers have businesses to run, so they have to be careful. But there are a lot of insurers that have waived liability and aren’t using it as a cut-off. A lot will go in with rehabilitation early on and will sort liability out later. If it later emerges they are not liable, they will pull out gradually. It makes good business and commercial sense to fund early rehabilitation in this way.’


Mr Homer agrees that insurers’ attitude to rehabilitation has changed but insists liability needs to be established before rehabilitation will be considered by his department. ‘There needs to be a valid claim. They need to satisfy the terms of the policy before we will support them back to work. The best thing clients can do is notify us of any possible claim as soon as possible so we can assess the situation and get involved where necessary.’


Ms Merfield says research has revealed that in 20% to 30% of cases, injured people take much longer to recover than their original injuries might warrant. In 5% the outcome was ‘totally disproportionate – everything went wrong’.


‘In these sorts of cases the medical model used by some companies – which just treats the symptoms – wouldn’t work. We use a vocational model that adopts a more holistic approach, helping to get them back to some kind of work and setting goals which they want to achieve.


‘People can slip in to what looks like malingerers’ behaviour for all sorts of reasons, such as if they have a soft tissue injury and a GP advises them to rest for two weeks – this is actually the worst thing they could do. Others have psychological problems, probably related to the treatment they received on the NHS.’


Mr Crawford says: ‘The professional judgement of a qualified medical person is essential. Some rehab providers are not using medically qualified people or monitoring treatment to ensure effectiveness. Each case should be analysed at end of programme to show benefits.’


Ms Merfield says most of the medical professionals who work at her company had to be brought in from abroad because, surprisingly, there is no recognised postgraduate course in the UK. ‘We are little bit behind here because we have had the NHS providing a free service. Insurers have only just caught on to the fact that the NHS is not the best service for getting people back to work.’


She says all the medical professionals working for her are regulated by their own professional bodies, but admits that there is no one body that regulates rehabilitation companies and that rogues do slip through the net.


‘You get good and bad in every profession. There are bad ones that have heard there is money to be made because this is an up-and-coming industry. But they won’t get any work if they don’t produce results.’


She says the Case Management Society UK has come up with a set of standards that allows case managers to audit themselves against best practice, but admits that this cannot be policed.


Mr Crabtree says: ‘Rehabilitation has become a growth business and a number of providers have entered into this area. Unfortunately, there is no accreditation scheme and the quality of one provider as against another varies dramatically.


‘When I do put people through rehabilitation, it is important to monitor the provision and outcome. Costs can be substantial and extended rehabilitation that is not beneficial is neither in the claimant’s nor the defendant’s best interests.’


Lucy Trevelyan is a freelance journalist