Zurich Insurance: personal injury claimants waiting for ‘£240 million in potential compensation’

Personal injury claimants are awaiting up to £240 million in potential compensation with waiting times for court hearings reaching 62 weeks for drivers disputing a car accident liability, according to Zurich Insurance.

Zurich Insurance estimates £240 million worth of claimant damages are currently tied up in the litigation process.

The insurer produced this estimate based on an average whiplash claims value and the number of claimants in the third stage of the process.

Given that it only relates to whiplash quantum disputes at the litigation hearing stage, Zurich says the overall value in delayed cases across the courts is likely many times higher.

Analysis of civil justice statistics by the insurer shows that UK claimants from road traffic accidents have waited on average 62 weeks just to be heard in court after a disputed car accident outcome or a whiplash claim if they litigate outside of the Ministry of Justice (MoJ) process.

Zurich Insurance says official figures highlight that the Covid-19 pandemic has made the court backlog of cases, both in the small claims and fast-track processes, much worse with claimants now waiting even longer from the moment they litigate to the start of the trial compared to January this year.

Between April and June 2020, only a quarter of the normal volume of trials took place so catching up on the shortfall will further extend delays.

Annually, there are around 500,000 whiplash claims logged in the UK (with an estimated value of approximately £3,000 per case) and even when cases stay in the MoJ process, if there is a dispute over valuation, the claimant may have to wait up to nine months for a stage three determination.

Zurich Insurance is calling on the UK government to publish the rules and procedures for the new whiplash portal as soon as possible to enable the insurance industry to scrutinise them and ensure that systems, policies, and procedures are thoroughly prepared and tested ahead of the April 2021 start date.

The whiplash portal is also without an alternative dispute resolution process, following confirmation in early 2020 that no practicable solution could be found.

Calum McPhail, head of liability claims at Zurich Insurance, comments: “Pressure on court capacity as a result of the pandemic are creating delays of over a year from the point of litigating to trial date, and this is only likely to be delayed further due to the ongoing impact of Covid-19.”

“As such, any further postponement to the civil justice reforms is likely to exacerbate this backlog and create more frustration for everyone. This kind of delay cannot be regarded as fair access to justice for an unrepresented claimant.”

“The government must ensure that the reforms are introduced alongside a straightforward mechanism to resolve disputes to free up court time and, ultimately, reduce the time taken to resolve disputes and settle claims.”

McPhail adds: “The insurance industry fully supports the personal injury whiplash reforms, but it is absolutely critical that when the new process is introduced, it must work fast and seamlessly for unrepresented claimants. If it doesn’t, there is a danger of driving these people into the hands of claims management companies who will take a cut of the pay-out.”

‘A huge source of frustration for injured people’

Commenting on the figures, Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations (ACSO), which represents consumers in the civil justice system, says: “Growing court delays are a huge source of frustration for injured people, but they will be even more put upon if the government rushes through its new claims portal. The likely chaos could add to the courts backlog and create an entirely avoidable civil-justice headache.”

“Adding an alternative dispute resolution mechanism is essential if the portal is to be effective, something both insurers and the government previously agreed with. Schemes are currently being piloted which could bring case conclusion down to a matter of days and be in all parties’ interests. Waiting for the results from these pilots and making rehabilitation part of the portal from the get-go will help ensure we get the whiplash reforms right.”

Keith Richards, chief membership officer of the Chartered Insurance Institute, says “we should all be rightfully concerned” about Covid-19’s impact on the justice system.

Richards continues: “We all know justice delayed is justice denied. Insurance plays a vital role in supporting people through some of the most difficult times, particularly when it comes to ongoing health and wellbeing costs following personal injury, and therefore we echo these calls from Zurich for the much needed whiplash reforms to be introduced in a timely fashion alongside a straightforward dispute resolution system.”

“We fully support these calls from insurers for a swift and seamless introduction of the new process and the government must ensure it also works for unrepresented claimants.”

Mark Dugdale