Solicitors and insurers disagree on the best way to streamline the claims process for road traffic accidents. Discussions need to move up a gear, reports Derek Bedlow

This week is Road Safety Week, and an apposite time to reflect on the carnage that takes place every day on our roads. While road traffic accident (RTA) casualties have been falling in recent years, according to statistics compiled by road safety campaign group Brake, around 3,500 people are killed each year in motoring accidents and another 35,000 are seriously injured.


But for personal injury lawyers, perhaps the most significant statistic is the quarter of a million people who sustain minor injuries in traffic accidents each year - they continue to be badly served by the claims management industry, according to many consumer groups and those in the legal and insurance professions. The criticisms are nothing new - claims still take too long to resolve, with estimates varying from between nine months and two years even for straightforward, low-value claims - and the costs involved in handling those claims are disproportionate to the damages ultimately awarded - 93 pence for every £1 awarded in damages for claims of less than £5,000, says the Association of British Insurers (ABI).


This situation persists despite the apparent success of the predictable costs regime for RTA cases (which account for around two-thirds of all personal injury claims) established in 2003, which generally meets with the approval of practitioners on both sides of the claimant/ defendant divide. As a result, there is now a plethora of initiatives from interested parties seeking to streamline and improve the process of making claims.


This is the subject of a forthcoming review by the Department for Constitutional Affairs (DCA), which is expected to release a consultation paper next year, and the CPR Rules Committee, as well as the focus of proposals from the ABI, the Association of Personal Injury Lawyers (APIL) and the Forum of Insurance Lawyers (FOIL), among others. By almost common consent, the problem with the status quo is that, despite the best efforts of the Civil Procedure Rules (CPR), the system is too adversarial, too uncertain, and too bureaucratic. Indeed, the pre-action protocols of the CPR may even have made the situation worse, meaning that insurers are often not even made aware of claims until up to a year after an accident has occurred.


Several proposals to address the inherent delays in the system are gaining momentum. One under consideration by the rules committee is to require claimants as well as defendants to make part 36 pre-action offers to settle before issue of proceedings. This, according to Charlie Jones, chairman of FOIL's motor claims special interest group and a partner at Liverpool-based law firm Weightmans, would mean that both parties would have a clearer idea of the other's position before full proceedings were commenced much earlier - making settlement more likely.


Another idea, again emanating from the defendants' camp, is to extend the fixed-costs regime to all RTA litigation up to a value of £15,000 (as already happens in Northern Ireland), while a further proposal being considered is the extension of the small-claims court limit from £1,000 to £5,000, to take advantage of its quicker processes and to enable more accident victims to issue their own proceedings. This has the support of the insurance industry and consumer groups such as Which? and the Citizens Advice Bureau, but many claimant solicitors remain opposed.


'Extending the small-claims limit will not improve access to justice,' says Tim Gorman, chairman of the Motor Accident Solicitors Society (MASS), which represents claimant solicitors. 'The system is too complex for lay people and the insurance companies will run rings around claimants.'


Other suggestions for reducing delays and costs hinge on improving the mechanics of the process. 'We should look at the efficiencies of those firms and insurers that have worked hard to simplify the process,' says John Spencer, partner and head of the legal expenses division at Northampton-based law firm Shoosmiths. 'A lot of future efficiencies could come from the process of providing timely information from insurers, the time it takes to get medical reports, and simplifying court processes.'


A recent initiative aimed at doing just that is Claim Sense, launched this year by national law firm Russell Jones & Walker and claims management company Elision, which aims to reduce the average time it takes to resolve straightforward claims from two years to three months. It intends to do this by commissioning an independent medical examination at the outset to determine if the claim is a straightforward one. If it is, then the client's solicitor sends a claim to the insurance company, which must accept or reject liability within 14 days. If this is accepted, then the victim can start his rehabilitation.


In the event that the injury is more serious than physiotherapy can resolve, a second independent medical examination takes place, and the parties have 21 days to agree the value of the claim. Failure to agree at this stage means that the matter is taken out of their hands and decided by an independent barrister acting as an assessor. The scheme has been running as a pilot with insurer AXA, and its originators claim that it has successfully reduced the length and cost of claims so far.


'The process dictates what is done and when rather than the solicitor,' says Fraser Whitehead, a Russell Jones & Walker partner. 'It is consent-based and puts the consumer at the front of the process and focuses on getting the patient better before compensation is awarded.'


However, for Claim Sense and other similar schemes to succeed there needs to be a degree of attitude adjustment on both sides of the debate. There are few more fractious relationships in the legal world than that between claimant personal injury solicitors and the insurance industry, with each side refusing to take the other's proposals at face value and distrusting each other's motives. 'Improving the process requires behavioural change on both sides,' says APIL chairman Richard Langton. 'But too often insurers seem to drag their feet, making low offers or spurious allegations of fraud.'


Unsurprisingly, then, claimant solicitors seem generally unconvinced by the insurance industry's own proposals, published by the ABI in December last year. These envisage that accident victims claiming less than £25,000 in straightforward cases could claim directly from the insurance company without taking legal advice, with compensation calculated according to a pre-determined tariff, and a time limit of three months imposed on insurers to accept or reject claims. 'We believe that clients will always get a better result by using a solicitor,' says Mr Gorman.


Both sides of the debate seem as far apart as ever, but says Mr Spencer, the main hope for real improvement in the system is for the various interested groups to work together to fund a balanced solution rather than throwing their own proposals at each other. He says the responsibility for bringing the warring parties together lies with the DCA.


'There's a case for constructive dialogue, but there is presently no central evaluation of the schemes that individual groups are proposing,' he says. 'The tension in the process is that insurers are rightly concerned about the costs of RTA claims, while the claimant lawyers rightly want their clients to be properly compensated. The DCA has not been assertive enough so far in how it's going about this process.


'The first stage should be to have a single balanced body that represents all of the groups, so that the consultation paper on how it will review the claims process is based on an agreed general view.'


Mr Spencer adds: 'You can disregard insurers' costs or solicitors' fees from the argument. The starting point should be to develop a system that is quick, efficient and fair and delivers compensation for victims. We need a system that delivers compensation at a price that society can afford.'


Derek Bedlow is a freelance journalist