By: 15 March 2017
National Accident Helpline to play “a more proactive role” in low value RTA claims through use of ABS model

National Accident Helpline is to play “a more proactive role” in the entire conduct and financing of PI cases by setting up new Alternative Business Structures (ABS).

In a statement to the London Stock Exchange, the claims management giant said that using ABS’ would allow it to enter into, and fund, a form of joint venture arrangement with law firms, allowing it to take a share of profit from work processed by the ABS.

The company said that the move had come about following the Government’s decision to restrict compensation for sufferers of minor whiplash injuries to small pre-defined amounts depending on length of injury, and to raise the upper limit for the small claims track for RTA claims from £1,000 to £5,000.

“Whilst, from a non-RTA perspective, these changes were lower than had been proposed, they still represent a fundamental change for the PI market as a whole which will lead to significant changes in the way many PI claims are processed,” said National Accident Helpline.

The CMC estimates that less than 30% of its total historic enquiries would have fallen into the new soft tissue injury claims tariff system.

It said that it was in close contact with its panel of law firms and that discussions with them had led it to conclude that it needed to invest in a proportion of it lower value enquiries through “different commercial and structural arrangements”.

It also revealed that it was committing further investment through 2017 which would result in a deferment of profit and cash flow, which would be realised in the future as cases settle. The CMC also said that it had the flexibility to handle enquiries in a number of ways, including taking the ABS route; offering deferred enquiry payment terms to selected panel firms to support incremental volumes; and using its panel model to provide services in support of generating and triaging enquiries.