Personal injury reforms only a job part-done

The reforms to date represent only a job part-done in building effective fraud resilience into the personal injury claims process, write Deborah Newberry and Martin Stockdale of Kennedys

The whiplash reforms are currently due to go live in May 2021, after numerous delays. Yet significant concerns remain about key issues, including the lack of new rules about the court process and new tariffs. Consequently, practitioners are operating in the dark and any preparation (including training or system adjustments) is having to be based on assumptions. It is, however, anticipated that the new rules will be made available soon.

The Civil Justice Council (CJC) working group has published its recommendations on what further reforms could be introduced for low-value (under £25,000) injury claims. With a focus on resolving meritorious claims more quickly and with the costs reduced, as well as preventing unmeritorious claims, the group concludes that once the pending ‘whiplash reforms’ have been implemented, there should be no further substantive reforms—at least not until the detail of recent measures is clarified. 

Where do the concerns lie?

Fraud continues to be one of the main concerns, due in part to the lack of proposed measures on how best to tackle it. While there was consensus that fraud remains a problem and that greater public awareness of the problem is required, beyond this though there continues to be little agreement in how to tackle it.  

Where there is no agreement on the problem it follows that there will be little agreement on the solution. We have always described fraud as a behaviour that seeks to benefit from exploiting weaknesses in the claims process that promote expediency and efficiency. Fraud measures are therefore a balance: too onerous and they create friction that increases cost and impacts genuine claims; too lax and fraud thrives. 

The reforms to date represent only a job part-done in building effective fraud resilience into the personal injury claims process. We believe that the below recommendations will help to address this:

• More effective data sharing and data processing freedoms for fraud prevention;
• More effective ID checks throughout the claims process; and
• The opportunity to test claims properly should remain an available deterrent to fraudsters, notwithstanding the aims to reduce frictional cost in the claims process. 

Fraud also feeds into other areas, such as qualified one-way costs shifting (QOCS), another particularly contentious issue within the working group, and one that will remain under active review.

Group members from defendant backgrounds with specialist fraud departments have particular concerns that if courts are required to approve a notice of discontinuance, litigants in person would have to deal with these applications, which would in effect become a trial. Others in the industry feel that further guidance is needed on fundamental dishonesty, while some feel that the provisions under both Section 57 of the Criminal Justice and Courts Act [2015] and in creating an exception to QOCS protection are working well.

Fraud is a behaviour and, given that it will change to the opportunity, finding a claimant to be fundamentally dishonest is a matter of fact and context, not a matter of defined lines. The danger of codifying fundamental dishonesty is that you will inevitably legitimise behaviours, however problematic, up to that drawn line. 

Beyond fraud, an extension to the fixed recoverable costs scheme (FRC) remains another of the most contentious issues, with no consensus reached. While the government’s proposed extension to the fast track is good news for defendants, it is contentious and unlikely to be implemented, albeit a smaller extension to the valuation should be anticipated.

There was significant disagreement as to what types of claims should be excluded with some arguing that claims involving child abuse, multiple defendants and cases involving multiple insurers, group actions, protected parties and fatal accident claims be exempt from the regime. It’s also unlikely that the government will extend the regime to industrial deafness claims, due to falling numbers.

What next? 

As the lack of agreement by the working group illustrates, there are areas with existing measures that require further consideration. We suspect that once these areas come into operation, more debate around them will be ignited and need to be addressed with some urgency. Time must then be allowed for these measures to settle and be assessed—especially after the Covid-19 pandemic, which is another significant factor in itself, especially with regard to the courts backlog.

Furthermore, the Ministry of Justice (MoJ) needs to provide urgent clarity on how the rules replace the abandoned alternative dispute resolution solution and what workable solution is going to be delivered.

The refreshingly pragmatic approach of the CJC must be listened to by the MoJ and taken onboard. Outstanding issues need to be addressed before further reform is contemplated and measures allowed to ‘bed in’ so that their effectiveness can be properly measured. Any unintended consequences or ongoing areas of concern can then be addressed with full visibility of the claims process and behaviours, and with reference to adequate data.

Claims Media