Personal Injury Reforms Archives - SX3 (Re)Insurance Claims Consultants

Whiplash Reforms – 10 Months On

philip — Fri, 29 Apr 2022 07:33:47 +0000

In the ten months since the Whiplash Reforms went live, we have seen over 200,000 claims submitted through the Portal and three sets of quarterly data yet little insight into how the claims industry is responding. Test cases planned to assess General Damages for hybrid injuries are outstanding and market commentators continue to raise concerns as to the effectiveness of the reforms.

SX3, in partnership with Glenesk, have engaged with fellow claims professionals across the industry in order to better understand how practices are actually bedding in on the ground.

During March and April, 19 different organisations, 9 claimant representatives and 10 compensators, were interviewed by senior claims consultants. We discussed the claims process from SCNF through to settlement, seeking to identify what was working, where there were still areas of uncertainty, common areas of concern, and where there were opportunities to improve.

We hope our report will aid colleagues in their thinking as to where we are with these reforms and hopefully, help shape the agenda going forward.

To download a copy of the results, click here.

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Whiplash Reforms – Outcome of Consultation on Medical Reporting

Adrian Gilbert — Tue, 10 Sep 2019 08:00:15 +0000

The Ministry of Justice (MoJ) has issued its response to the consultation into “Future Provision of Medical Reports in Road Traffic Accident related personal injury claims“.

In a welcome clarification, the Government will extend the MedCo system to cover all injury claims related to road traffic accidents under £5,000, with the existing fixed recoverable costs regime applying to those initial reports for non-soft tissue injury too.

The outcome provides continued encouragement that the intended implementation date of April 2020 for the whiplash reforms, including the new portal system, remains in place.

Summary

The consultation relates to the whiplash reform programme introduced by the Civil Liability Act and expected secondary legislation increasing the small claims track limit for road traffic accidents to £5,000. After seeking the opinions of medical experts, medical reporting organisations (MROs), legal representatives and insurers, the Government has concluded that:

The existing MedCo system for obtaining reports for soft-tissue injury claims will be extended to cover initial medical reports for all RTA related personal injury claims under £5,000
Initial medical reports for non-soft tissue personal injury claims can be provided by General Practitioners and Accident and Emergency (A&E) consultants only
The existing fixed recoverable costs regime for soft-tissue injury medical reports will apply to all initial RTA related non-soft tissue injury medical reports for claims under £5,000
To protect unrepresented claimants, new qualifying criteria and standard service level agreements will be developed for medical reporting organisations (MROs) and experts

Expansion of MedCo

The Government has elected to widen MedCo’s remit so that all initial medical reports for RTA-related PI claims in the small claims track are dealt with using that system. This extension received 74% support amongst those who responded to the proposal.

The extension of MedCo was identified as providing consistency with the existing system and also more user-friendly then alternatives, given expected increases in the number of unrepresented claimants.

Claimant representatives suggested that additional funding should be made available to ensure that medical reports for unrepresented claimants are always free of charge. As we have noted previously, the position of possible fee remissions remains unclear, and has not been addressed in greater detail in the response.

Reports for non-tissue injury claims under £5,000

It has been clarified that medical reports obtained for non-tissue injury claims (whether or not accompanied by a soft tissue injury) will be provided by GPs and A&E consultants only.

Responses in the consultation noted “their experience and training made them more suitable to provide these reports.”

Broadening the types of medical experts registered on MedCo

Presently, doctors, consultants and surgeons registered with the General Medical Council and physiotherapists registered with the Health and Care Professions Council can be accredited by MedCo to provide medical reports for soft tissue injury claims.

The consultation sought clarification on whether other types of specialists, such as dentists, ear, nose and throat specialists and psychologists should be accredited by MedCo to provide medical reports for road traffic injuries, in light of the proposed inclusion of non-tissue injuries.

In response, the Government has made clear that it will not be adding additional specialists to the MedCo process for the purposes of providing initial medical reports. The identification of the need for such a report was likely to be “difficult for unrepresented claimants“, and that the recruitment and accreditation of such specialists in any event would be time-consuming, and not cost-effective.

However, the Government did note that it “may be worthwhile adding such specialists to MedCo for the purposes of sourcing additional recommended reports.” This will be considered with the MedCo board and stakeholders at a later date.

A significant number of respondents (87%) also made clear their objection to an extension of the types of experts allowed to provide medical reports for soft tissues injury claims, to include chiropractors and osteopaths. Common objections noted their classification as complementary therapy providers, and that their experience was not at “sufficient a level to support their addition” nor would “the market support their inclusion“

Fixed costs medical reports

The Government has decided it is appropriate for the fixed recoverable costs regime to be extended to RTA related non-soft tissue injury claims within the increased small claims track.

The current level of £180 plus VAT will be applied, providing “certainty to both claimants and to those providing reports“.

This conclusion was reached despite objections from insurers and defendant representatives that the amount should be lowered, particularly for those claims which will fall within the whiplash tariff; objections from claimant representatives also argued that non-soft tissue injuries were more complex, and thus the cost should be higher.

This fee cap will be reviewed following the full implementation of the whiplash reform programme in April 2020.

In addition, having not agreed that further specialists can complete initial medical reports, the Government determined that there should be no extension of the fixed recoverable costs regime beyond those currently set for additional reports provided by Orthopaedic Surgeons and A&E Consultants.

Once again, this situation will be kept under review when the reforms have been fully introduced.

Options for obtaining medical reports for unrepresented claimants

The initial consultation proposed retaining “the current MedCo model of providing a randomised list of medical report providers, but with proportionate and necessary changes to meet the specific requirements of unrepresented claimants“.

The Government has confirmed that this retention may require changes to the qualifying criteria for MedCo to enable the proper service of the needs of unrepresented claimants. The details will be published prior to April 2020 to allow stakeholders to determine whether or not they wish to opt-in to the service for unrepresented claimants.

The responses from MROs and directly instructed experts (DMEs) suggest that there will be “sufficient operational capacity to support the assumed volume of unrepresented claimants“. There was also heavy support for the introduction of standardised service level agreements for MROs and DMEs dealing with unrepresented claimants to provide additional consumer protection.

A link to the full Government response can be found here

Credit to Clyde and Co for the original article.

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Government explains why it set the discount rate at -0.25%

Adrian Gilbert — Wed, 17 Jul 2019 08:08:58 +0000

The Lord Chancellor and Justice Secretary, David Gauke MP, went against the advice of government actuary Martin Clarke in setting the new Ogden discount rate, government documents reveal.

On 15 July, Gauke announced that the rate would rise from -0.75% to -0.25% on 5 August.

In a 77-page report dated 25 June 2019, the Government Actuary’s Department had recommended that the rate be set at 0.25%.

Responding to the government actuary as part of yesterday’s announcement, Gauke referred to the department’s analysis as “a starting point for my determination rather than an end point”.

Disagreement

In a letter to Gauke, Clarke calculated that a rate of 0.25% would have a 50:50 likelihood of overcompensating and under-compensating the average claimant.

The Lord Chancellor regarded this 50:50 split as an unacceptable compromise. As an example, he highlighted that it would give claimants only a 65% chance of receiving 90% compensation.

Gauke noted: “I consider this to give rise to too great a risk that the representative claimant will be under-compensated, or under-compensated by more than 10%”.

It was decided that claimant outcomes should be more heavily weighted towards over-compensation, consequently pushing the Ogden rate below the recommended 0.25%.

Gauke did concede that the decision “involves making a series of assumptions and judgements in considering the evidence and economic variables that apply” but insisted he should “build in further prudence” in “order to recognise that in any individual case one or more of those baseline assumptions may not apply”.

Credit to Insurance Age for the original article

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Civil Liability Bill passes 3rd reading in House of Commons

Adrian Gilbert — Wed, 24 Oct 2018 15:34:06 +0000

No further amendments

The bill was passed without any further amendments by a majority of 56. The Bill now passes back to the House of Lords to consider the amendments made during the Commons debates.

A full overview of the Civil Liability Bill and the changes made to date can be viewed and downloaded here.

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Civil Liability Bill – Now delayed until April 2020

Adrian Gilbert — Thu, 19 Jul 2018 08:22:50 +0000

Government pushes date back for “extensive testing”

The Ministry of Justice (MoJ) has confirmed the government will delay its whiplash reform measures from 1 April 2019 to April 2020. The news was delivered in an MoJ response to the Justice Select Committee’s report on Small Claims Limit for Personal Injury.

In its response the MoJ wrote: “The government is acutely aware that the proposed approach will fundamentally transform how whiplash claims are handled and that any concerns around access to justice have to be addressed promptly.

“There will need to be extensive user testing in order to ensure that the system is easy to use for all user groups and that the guidance is clear.”

The MoJ noted that it was crucial the reforms, and implementation of the online portal, was “done right rather than quickly”. Adding: “This is why the government is now proposing for the platform to be ready for large-scale testing by October 2019 with the view to implementing the whiplash measures, including the rise in the small claims limit to £5,000, fully in April 2020.”

Reaction from stakeholders

The Association of British Insurers stated it was pleased that the MoJ “remains committed” to the changes. James Dalton, director of general insurance policy commented:

“Getting the implementation of these reforms right is absolutely critical if the system is to deliver fairer outcomes for claimants and millions of motorists so it is sensible to delay implementation until April 2020.”
Andrew Twambley, spokesperson for Access to Justice (A2J) also welcomed the delay but also criticised the overall changes:

“Creating, testing and implementing new user-friendly technology to deal with injury claims is enormously complex, and the government’s IT track record is dreadful,” said Twambley. “Ministers have yet to explain why a computer, built and administered by insurers, is better for injured people than a legal professional who is 100% on the side of that injured person”. “The MoJ has again ducked this question in its response to the Select Committee.”

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Civil Liability Bill: Government secures win by narrow margin

Adrian Gilbert — Wed, 13 Jun 2018 09:23:33 +0000

Opponents of the government’s whiplash reform programme suffered a blow in the House of Lords yesterday when an attempt to kill off a key part of the legislation was voted down.

Peers defeated a proposed amendment from a former lord chief justice, the crossbencher Lord Woolf (Harry Woolf), to remove tariffs for limiting damages in the Civil Liability Bill. The vote, which followed more than two hours of debate, was won by the government by 218 to 205.

The vote at the report stage in the Lords will be a bitter pill to swallow for campaigners who had pinned their hopes on the upper house putting pressure on the government to amend its plans. It is now unclear what, if any, further efforts can be made to have the legislation further redrawn, as it moves onto the House of Commons.

The government did make one concession, pledging to bring forward at third reading an amendment to require the lord chancellor to consult the lord chief justice before setting or amending the tariff.

Full article on the Law Gazette – https://www.lawgazette.co.uk/news/civil-liability-bill-government-secures-crucial-win-by-just-13-votes/5066460.article

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Whiplash reforms to be introduced in April 2019

Adrian Gilbert — Thu, 15 Feb 2018 10:09:23 +0000

The Government has stated its intention to introduce the whiplash reform programme in April 2019.

The new timetable was outlined by Ministry of Justice officials in a meeting with the Motor Accidents Solicitors’ Society (MASS), Association of Personal Injury Lawyers (APIL) and the Law Society this week.

It is perhaps no surprise the initial target implementation date of October 2018 has been pushed back by six months due to the ongoing effect of Brexit dominating the legislative agenda.

MoJ officials have advised the whiplash reforms for road traffic accidents (RTA) claims and increasing the small claims track limit from £1,000 to £5,000 for those claims, will be the principal focus.

The Civil Liability Bill itself has yet to be published, but given the timetable now set out, the publication is expected to be sooner rather than later.

The tariff system is expected to echo many of the proposals contained in the Prisons and Courts Bill, including introducing a tariff system for claims with an injury duration of between 0 and 24 months (to replace the JC Guidelines) and a ban on offers to settle without medical evidence in RTA-related whiplash claims.

Opposition to the whiplash reforms from interested parties remains vocal, and is only likely to increase in light of the April 2019 date.

Further plans for the increase of the small claims limit for all other personal claims up to £2,000 appear to have been placed on hold by the Government, given they were not mentioned during the Government update.

The whiplash and other personal injury reforms are currently being scrutinised by the Justice Committee and a report is expected to be published in the next few weeks.

Source – Lexology – https://www.lexology.com/library/detail.aspx?g=c8fc1332-c4ae-4193-b618-37a3870207d1

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Whiplash and small claims limits inquiry launched

Adrian Gilbert — Mon, 20 Mar 2017 11:50:27 +0000

The Justice Committee launches a short inquiry into Part 5 of the Prisons and Courts Bill on road traffic accident (RTA) related ‘whiplash’ claims, and on Government plans to raise the small claims limit for personal injury.

Call for written submissions

The Committee invites written submissions of no more than 3,000 words in length addressing the following questions:

The definition of whiplash and the prevalence of RTA-related whiplash claims
Whether or not fraudulent whiplash claims represent a significant problem and, if so, whether the proposed reforms would tackle this effectively
The provisions in Part 5 of the Bill introducing a tariff to regulate damages for RTA-related whiplash claims, with an uplift in exceptional circumstances; and banning the settlement of claims without medical evidence.
The impact of raising the small claims limit to £5,000 for RTA-related whiplash claims, and of raising the small claims limit to £2,000 for personal injury claims more generally, taking account of the planned move towards online court procedures
The role of claims management companies in respect of these matters.

The Committee has already taken oral evidence on this topic from the Association of Personal Injury Lawyers and the Association of British Insurers, on 7 February 2017.

Government’s consultation on RTA-soft tissue injuries

Submissions previously made to the Government’s consultation on RTA-soft tissue injuries can be sent to the Committee for information (the Committee cannot accept material prepared for other purposes as formal evidence but can refer to previously published material in its report), or alternatively fresh submissions can be made through the Committee’s evidence portal for this inquiry.

The Committee intends to hold one oral evidence session following receipt of written submissions, before preparing a report on the subject.

Original article can be found on the Parliament.uk website – http://www.parliament.uk/business/committees/committees-a-z/commons-select/justice-committee/news-parliament-20151/personal-injury-whiplash-and-the-small-claims-limits-inquiry-launch-16-17/

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MoJ confirms £5k limit only for whiplash claims

Adrian Gilbert — Thu, 23 Feb 2017 10:13:26 +0000

The government today confirmed it will increase the small claims limit to £5,000 – but only for whiplash claims.

Announcing the Prisons and Courts Bill, the Ministry of Justice said it will impose a new threshold of £2,000 for all other personal injury claims.

The figure is a retreat from the original proposal to increase the limit across the board, but the reform is still likely to be unwelcome with claimant lawyers who face being effectively removed from low-value whiplash claims altogether.

The MoJ will push through with plans for fixed tariffs to cap whiplash compensation payments. No figures have been released, but the department suggests damages will be ‘proportionate’ to the level of injury suffered.

There will also be a ban on any offers to settle whiplash claims without providing medical evidence.

Legislation changes

The ban and compensation tariffs will both require primary legislation and will form part of the Prisons and Courts Bill.

The change in the small claims limit needs just secondary legislation and could in theory be introduced as soon as October, but the Ministry of Justice has confirmed it will only bring in the revised limit when the bill has become legislation and all the plans can be implemented together.

The MoJ today said it expects car insurance premiums to be cut by around £40 a year as a result of the reforms.

Lord chancellor Liz Truss has previously stated the government’s aim to target those who have ‘exploited a rampant compensation culture and seen whiplash claims as an easy payday’.

Comments

Justice minister Sir Oliver Heald today said: ‘We are determined to get a grip on the widespread compensation culture that unfairly impacts millions of motorists through higher premiums.

‘So we are cracking down on minor, exaggerated and fraudulent whiplash claims. And we expect insurers to fulfil their promise and put the money saved back in the pockets of the country’s drivers.’

The Association of Personal Injury Lawyers today showed few signs of celebration at the partial climb-down on the small claims limit, accusing the government of a ‘fanatical’ interest in suppressing the right to claim for legitimate injuries.

‘The Prisons and Courts Bill includes proposals for fixed tariffs which will inevitably mean people with genuine injuries are under-compensated, said APIL president Neil Sugarman.

‘There will be an explosion of calls and texts from claims management companies encouraging people to make personal injury claims, even if they haven’t been injured.

‘The small claims court is designed for people to represent themselves and this will just be a business opportunity for claims management companies.’

Qamar Amwar, managing director of marketing company First4Lawyers, said the speed of the government’s response to its consultation – which closed on 6 January – ‘simply paid lip service to a decision that was already made by the government in cahoots with the insurers behind closed doors’.

He added: ‘The initial consultation raised many questions around the fairness of the proposals, but also how they would be implemented.

‘To date the government has not answered these questions, nor have they answered them through this bill.’

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Industry calls for action after whiplash reforms delayed

Adrian Gilbert — Tue, 08 Nov 2016 09:24:53 +0000

Insurers promise they’re “not going quiet” as Ministry of Justice delays compensation reforms.

Insurers have pledged to continue to push for action following the news that the government has delayed reforms to compensation for minor whiplash injuries.

Market experts stated that while the postponement of the consultation was disappointing at first, the Ministry of Justice’s remarks that reform was not “off the agenda” was proof that changes in this area were still coming.

“We’ll be pushing on all fronts for this to happen and we’ll be continuing to shout about the things that are happening to our customers that we think are wrong,” Rob Townend, claims director at Aviva UK General Insurance, said. “We’re not going to go quiet on this subject.”

One of the reasons given for the delay is the vote for the UK to leave the European Union, which has meant that the Ministry of Justice has been distracted by other issues.

Difficult solution

However, according to David Williams, technical director at Axa Insurance, another reason is that one of the two original proposals was too difficult to find a possible solution for.

“One was very straight forward, which was to increase the small claims limit to £5,000,” Williams explained. “But trying to reduce the number of whiplash claims by passing legislation that could potentially prevent other genuinely injured people from getting general damages is a massive and complicated can of worms.”

Meanwhile, Andrew Twambley, spokesperson for Access to Justice, said the decision to put the reforms on hold was “great news for the injured public”.

“Prior to 13 October the Association of British Insurers and the insurance industry were on a mountain of power, whereas the power now has been shifted,” he argued. “There’s now an equal playing field and more of an appetite by both sides to get together, collaborate and sort it out.”

His view that it is now up to the interested parties to work collaboratively and provide a solution was echoed by players in the insurance industry.

“It’s a great opportunity for insurers and the claimant lobby to, rather than just being abusive to each other, come up with something which would achieve what the government is seeking to do that all parties could agree on,” Williams stated.

Pushing for change

Graeme Trudgill, executive director at the British Insurance Brokers’ Association, noted that the broker trade body shared the insurers’ concerns and would continue to push for change.

“The big cost on motor insurance due to something like whiplash means that we are seeing motor rates that are quite high and we’ve seen some quite significant increases over the last three to six months,” Trudgill continued.

“That’s always a difficult one to explain away to a customer, so we want fairer pricing and competitive rates for customers. We also don’t like fraud.”

Matt Munro, chief executive officer of broker iGo4, said that whiplash claims were an issue for brokers as well as insurers, but highlighted that the reforms originally proposed were too widespread. He argued that there needed to be a balance between “eliminating fraudulent, aggressive claims and the rights of those that have been injured”.

“Something needs to change because there’s still a lot of unhelpful and unneeded activity being done by claims management companies, which will create spurious claims and fraud,” he continued. “There definitely needs to be some type of reform, but it must be focused on the right things.”

Moving forward

One solution that has been aired previously, and clearly remains at the forefront of the experts’ thinking, is to reduce the period of time after an accident that a person can make an injury claim. The aim would be to stop claims management companies from contacting people about accidents that happened years before.

In addition, Townend pointed out that the compensation culture also needed to be tackled, citing the example of organised criminal gangs staging accidents and “putting people in harm’s way”.

“This really is about the consumer and everybody thinks whiplash is a victimless crime, but it’s not,” Townend concluded.

“We’re calling for the consultation to be issued, because then all stakeholders will have the opportunity to put forward their solution to the problem.”

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