The next big shakeup of the low-value personal injury sector is suddenly looking very close: the Civil Liability Act reforms are scheduled to come into effect on 6 April.
As most readers will know, the small claims limit for personal injury will soar from £1,000 to £5,000 for road traffic accidents, while compensation for whiplash injuries will be subject to set tariff sums far lower than current compensation levels.
The levels at which compensation tariffs will be set have not yet been published by the government, and nor has anyone got a whiff of the new protocol that must be produced by the Civil Procedure Rule Committee to bring the reforms into being. So you can forgive observers for gaining the impression that things are not yet ‘oven-ready’. Claimant lawyers have called for a delay to ensure that access to justice does not suffer at the expense of a rigid adherence to what now seems a highly ambitious timetable. But so far, there is no sign of any deferral.
The rise in the small claims limit will effectively take qualified lawyers out of this part of the market, because their fees will no longer be recoverable. Front and centre will be an all-singing, all-dancing, user-friendly ‘portal’, through which injured people will submit their claims to defendant insurers without the need for a lawyer.
Many will recall the difficult birth of the Ministry of Justice’s current RTA Claims Portal in 2010, when it was plagued by technical problems that still send shivers down the spine of many a low-value PI lawyer. But this time around, users of the new portal – for claims worth up to £5,000 – will not be professionals with in-house IT support. They will be Joe and Josephine Public. The portal will need to work for the young and the old, the IT savvy and committed Luddites, across laptops, tablets and mobile phones. The need for a straightforward, workable system will be even more pressing and the IT challenge much greater. True, there will also be a ‘contact centre’ for those who cannot access the digital service, but this is clearly not where the bulk of claims is intended to be dealt with.
So will this new portal system be ready in time? Earlier this month, the Motor Insurers’ Bureau, which the MoJ has tasked with delivering the new system, suggested that it was on track for the April delivery date. It reported that its first round of testing had proceeded as planned in November, with ‘very positive’ results, while a second phase of testing would take place this month. ‘High level’ feedback will be published on the results, it added.
Isn’t the MoJ putting a fox in charge of a hen house? Won’t the insurers have an unspoken incentive to ensure that the system does not function too well?
The bureau’s comments were met with a large dollop of scepticism by claimant lawyers and it is easy to see why. The notion that it should be left to insurers to fund and develop an IT system through which they will pay claims brought directly by the public seems, on the face of it, somewhat dubious. Isn’t the MoJ putting a fox in charge of a hen house? Won’t the insurers have an unspoken incentive to ensure that the system does not function too well? After all, the more usable it is, the more it will be used – and the more insurers will end up paying out.
Given the deep suspicion with which defendant insurers and claimant lawyers regard one another, these concerns are inevitable. But last year, the MoJ’s David Parkin, speaking at a Westminster Legal Policy Forum debate, was adamant that the new portal would not be captured by insurers. He stressed that the development of the portal included ‘a vast range of stakeholders from the claimant lawyer side’, adding that ‘the decision on that portal and how it is used and applied to litigants in person is in the hands of the lord chancellor. He is the decision-maker’.
If that does not give enough assurance to those representing injured people, however, there is another important safeguard: reputation. The insurance industry has got what it wanted – a rise in the small claims limit and tariff fees for whiplash. That is a big win. In financial terms, insurers have quantified the savings due to be realised by the Civil Liability Act reforms at £1.1bn, which they say could translate into a £35 cut in motor premium per driver.
In return for all this, the industry has been entrusted with the task of making it possible for members of the public to bring claims directly and be dealt with fairly. It needs to succeed in this and be seen to do so. Evidence of how well the platform actually performs, and the levels of settlement achieved, should be plain to discern in the statistics. If the portal fails, there will be nowhere to hide and the damage to the public’s trust in the insurance industry could be great.
Rachel Rothwell is editor of Gazette sister magazine Litigation Funding, the essential guide to finance and costs. For subscription details, tel: 020 7841 5523