Personal injury reform – a pain in the neck?

At the end of this month the ‘Official Injury Claim’ portal for low-value road traffic accident claims finally goes live. With legal fees for RTA claims under £5,000 no longer recoverable, injured people should be able to submit their claims through the new portal without needing a lawyer.

This is a huge step, and it is hard to predict how things will pan out. From the insurance industry’s perspective, the ideal outcome would be for law firms and claims management companies to withdraw from this part of the market. If consumers are no longer being blitzed by CMC calls and texts, claims volumes are bound to fall. The portal itself is certainly not going to be promoted to anything like the same extent.

Will lawyers leave the market? Largely, yes. But some firms will stick it out – particularly if many of their competitors exit the field of play, leaving market share up for grabs. With such paltry compensation sums on offer, only those firms with the slickest technology and processes will be able to turn a profit, but this is a very tech savvy part of the market.

It will be interesting to see how often certain injuries are claimed for when people are inputting them into a computer, compared with when they are providing information to a lawyer

What about the CMCs? The call centres and infrastructure are already there, and business will continue as usual for claims of £5,000 and above. So what will the CMCs do when, on initial enquiries, someone’s claim sounds like it will be below the £5k threshold? Will they say, ‘sorry, we can’t help you with that – but you might like to submit your own claim via the Official Injury Claim portal’? Or will they still find a way to make money from that claim, perhaps by helping claimants to process their claim for a small fee, in what after all should be a very straightforward system. If CMCs can still derive a value from these claims, then I would not bank on a significant drop in volume.

But let us turn to the unrepresented person who will be navigating their way through the new portal. There are constant reminders throughout the system that it is only for claims worth less than £5,000; though there is an obvious problem that claimants may not really know how much their claim is worth. The portal has been through several rounds of testing involving people with different levels of reading or learning disabilities, and gained input from third-sector organisations. It is laid out in an accessible way, with explanatory sidebars giving extra help. But I would not say it always uses the plainest English – for example, it uses words like ‘uplift’, which might cause a few furrowed brows among the public.

The portal provides a dropdown menu of the different injuries for which you can claim, specifying different parts of the body, plus things like ‘shock / anxiety’. It will be interesting to see how often certain injuries are claimed for when people are inputting them into a computer, compared with when they are providing information to a lawyer. Will the temptation be to click, click, click on as many injuries as possible to boost the tariff fee? I’m reminded of research about how customers who would never ordinarily shoplift are much more likely to steal from self-service checkouts because there is no human involved. Claimants will have to obtain a medical report further down the line, of course – though the medic has to rely on what the client tells them – and they must also sign a statement of truth.

Once all the relevant information and the medical report are submitted into the system, the client has three choices: ‘Wait out prognosis’; ‘Proceed to offer’; or ‘Obtain a further medical report’. Faced with money now or money later, and without anyone to advise them that it may be better to wait, I suspect many claimants will prefer to press ahead with the offer, even if they are still feeling some pain.

If the claimant receives an offer, they have a number of options: accept, reject, make a counter offer, wait to see how their symptoms develop, or ‘prepare for court proceedings’. Meanwhile if the insurer denies liability, they can ‘accept’ this, ‘challenge’, or ‘go to court’.

So if the claimant is not happy with the offer received or has had compensation denied, at a click the system can generate the relevant forms to start court proceedings. The deterrent from doing so is a warning to claimants that they may have to pay an (unspecified) court fee, which the defendant will have to repay if it is found to be at fault.

The big question here is how many claimants will press the nuclear button and head to court? The answer depends on how many of them feel unfairly treated by insurers and believe that having the matter decided by a judge is the only way to get a deal they can trust. Let us hope this is not too many, because if there is one thing the overburdened court system does not need at the moment, it is an influx of low-value whiplash claims.

Rachel Rothwell is editor of Gazette sister magazine Litigation Funding, the essential guide to finance and costs. For subscription details, tel: 020 8049 3890