Monday, 31 May 2021 sees the launch of the government’s Official Injury Claim (OIC) portal, the main outcome of the Civil Liability Act. More than 2,000 days after the plans were first announced by George Osborne, as well as five Lord Chancellors, two general elections and a global pandemic, the way in which most people injured on our roads claim for compensation is to change radically.
The twin intentions of the policy were to tackle insurance fraud and bring down the costs of motor premiums. It will be hard to judge whether either will be a success, at least any time soon. There is no independently verified fraud data to compare and the Financial Conduct Authority has to wait until 2024 before working out whether the promised £35 per premium saving has been delivered.
In the meantime, claims numbers look likely to fall further. They had been dropping for a number of years following the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which brought about various measures to bring down legal costs. Covid-19 led to considerable further decline, and while road traffic is now recovering fast and there is no reason to believe that road traffic accidents are not following suit, the government estimates that the new portal could process as few as 400,000 personal injury claims a year, half the number of just a few years ago.
The numbers will fall too because a new tariff for whiplash injuries is to come into force, reducing dramatically the compensation available to victims for pain, suffering and loss of amenity. This, plus the removal of lawyers’ fees, is where the savings to consumers should come from.
There will be few in the wider insurance and legal services sector who will not be apprehensive about the changes, and especially about what will happen when the new portal goes live. It is completely untested on live cases and no similar scheme has been attempted anywhere else in the world. The programme has been beset by delays and it will be impossible to value cases that involve a combination of an injury that is subject to the tariff and one which is not.
These so-called ‘hybrid’ scenarios represent as many of one in three people who currently make a claim following an accident that wasn’t their fault. It is hoped that the issue will be tidied up through Court of Appeal rulings in due course. In the meantime, and even by the government’s own figures, as many as 140,000 legitimate claimants per year – many with quite severe injuries – will be in a legal no man's land and be denied justice.
The long-term response of the sector to the whiplash reforms has to be one based both on realism and pragmatism. Realism because the changes are now with us, although the flawed thinking behind them has not gone anyway. Pragmatism because that is what injured people need, not a rehashing of old arguments. Thanks to investments in IT and new claims-handling processes, professional representation will still be available, and it seems certain that the vast majority of claimants will seek the support of one sort or another. This is both for convenience and because the new claims processes are arcane enough the scare many people off.
More reforms could be in the pipeline. Attention must be paid to rehabilitation and how credit hire functions, in other words, how people and their vehicles are repaired. Some minor changes to claims for non-RTA lower-value personal injuries are due to come in next April, and there is a question mark over the temporary and partial protections the government introduced for children and protected parties injured in motor vehicle collisions. Other vulnerable road users, namely pedestrians, cyclists, motorcyclists and horse riders, were exempted from the changes following a successful campaign by ACSO.
The next few weeks and months will see the reforms bed in. Teething problems look all-but-inevitable, and public confusion guaranteed. A recent survey from Consumer Intelligence found that nearly 90 per cent of the public were unaware of the reforms, little surprise as the government has spent precisely nothing on making the public aware of these significant changes to their legal rights, although there are plans for a social media campaign over the Bank Holiday weekend before the portal goes live.
Those of us who have lived and breathed the reform process will need to stay alert, both to make sure the changes work as they can and to hold the government and the insurance industry to account over its promises.
The one clear lesson in the 2,014 days since the reforms were announced should be that industry-led solutions are the best way to tackle most issues. Any debated in future must focus not on the producer interest but on the consumer who pays for everything – and whose needs, if injured on our roads or anywhere else, must trump all other concerns.
Author: Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations (ACSO).