Any consideration of the future of the Government’s motor accident claims reforms to seem trivial and unimportant right now. Covid-19 is a global pandemic of the like that has been never seen before, enveloping the entire world with a speed that simply wasn’t possible only a few decades ago prior to the advent of cheap and easily available international air travel. Although still early days in the health crisis, it is increasingly apparent, almost by the hour, that the social, economic and political ramifications of the virus will be felt by the world for months and years ahead. Yet other issues cannot be entirely ignored. The daily business of our lives must continue as best we can during this difficult period and as history as shown, we will all adapt and find a new normal.
It is of course entirely unknown precisely what impact Covid-19 will have on the Government’s so-called whiplash reforms. Having finally accepted what most of us have long known – that the new claims process is simply not ready – the Ministry of Justice announced a delay on 27 February in implementing the Civil Liability Act and launch of the new portal (Official Injury Claim Service) until 1 August 2020. Given the scale of disruption that is likely to befall every corner of society, achieving the new timetable is likely to be extremely challenging. It is tempting to suggest that a further delay is inevitable, but we do not think that solicitors should assume this quite yet. The eagerness of MoJ and the insurance industry to proceed as speedily as possible cannot be over-estimated.
Every Government department will of course be focussed on trying to manage the response to the coronavirus, but some semblance of normality in government departments will at least try to continue. The Motor Insurance Bureau, the developer of the new OIC Portal, has naturally communicated that they are still working towards the August date until they hear otherwise from MoJ.
Our concerns about the new timetable remain precisely the same as when the delay was announced a little over two weeks ago, before the world changed and Covid-19 still seemed a distant and minor threat to most of us. There is not much time between now and August to solve some of the major problems with the new claims process. They must be addressed as a matter of urgency to ensure that the process is fully functional before it is implemented.
The most obvious issue is that we need a fit-for-purpose PAP and new Rules. That the CPRC is wrestling with the production of the new Rules at all is only down to the fact that there are so many thorny but essential issues still to resolve. Without the Rules, we have no Statutory Instruments to implement the Civil Liability Act.
Whilst MASS represents its members – professional users of the new claims portal – as an organisation, our primary concern is to represent the victims of RTAs. For the first time the PAP and Rules must be written in such a way that they are fully comprehensible to Litigants in Person (LiPs) who have not spent years studying and then practising civil law. There are many challenges.
LiPs will need assistance to help them understand the new process and ensure that the principles around access to justice are upheld. There is still little evidence of any consideration about how the digitally excluded will be able to pursue claims outside the Portal with the proposed call centre operation unable to give advice and process claims throughout the “customer journey” from registration to processing compensation payment.
The new portal currently contains terms/concepts such as “compensator”, “impecuniosity” and “subject to causation.” The LiP will simply not understand such phrases and the new Portal, Rules on evidence, statements, Part 36 offers and costs will all need to be written in plain and understandable English.
On compensation, urgent clarity is needed about how the mixed/multiple injuries conundrum is to be resolved. LiPs will need guidance about how to determine whether their claim is likely to be under the new £5,000 small claims track limit or not, to prevent/reduce the number of claims that can be rejected so leading the claimant to begin a fast track claim from the start. Some claimants will need to restart a claim if they switch from one law firm to another.
The new process anticipates that where liability is disputed a claimant will issue court proceedings “without medical evidence” and go to court for a liability-only trial. Without a medical report it is not clear how the claimant be able to value their claim for the purposes of calculating the court fee. In the claims where liability is only partially admitted, quantum is only resolved at the end of the claim making interim payments unlikely. Again, this needs to be set out in clear terms for LiPs.
We urgently need clarity around sanctions if we are to avoid the situation where there is no penalty if an insurer fails to respond in the hope that the claim will eventually be dropped. Given that the new portal website does not accept payment details, clear guidance must be available to ensure that claimants know who, when and how they will receive their compensation, and what protections they have that the claim will be settled within a reasonable time period.
Guidance is needed on the new medical process for all users, specifically on when the medical report will be paid for, how it is to be paid, how it is to be obtained if liability is in dispute and with second medical reports, who will pay, for instance in cases where claimants wish to wait and see if they recover as expected by the prognosis. There is currently wholly insufficient support for claimants in dealing with medical reports.
Following the MoJ announcement that ADR will not be part of the online service, where liability/quantum cannot be agreed with the paying party, the claimant will now be directed to court which is slow, expensive, increases pressure on courts, increases the likelihood of inequality of arms, and undermines the concept of dispute resolution. This defeats the whole object of streamlining the claims process.
With rehabilitation costs, credit hire and credit repair not included within the new portal, claimants will need guidance on this entire process, who arranges and pays and whether settlement (including any negotiated settlement on liability) is binding on losses that are excluded. They will need assistance on whether to accept an offer in full and final settlement” of their claim when rehab, credit hire and repair are separate. Without the answers to these and other questions, there is a huge risk of claimant detriment.
The current iteration of the new IT platform assumes that claimants will issue court proceedings multiple times; once to establish liability, again where quantum is disputed, and again to recover losses that are excluded from the new process such as credit hire, credit repair and credit rehabilitation. These risk being in breach of the law of res judicata.
With minors and protected parties to be exempted from the increase in the SCT limit to £5,000, but still subject to the whiplash tariff, it is far from clear how these cases will be commercially viable for any legal representative, likely resulting in claimant being left vulnerable.
We also find it deeply troubling that the Ministry of Justice still has no plans for the established practice of independent governance of the new Portal, with it to be fully and solely operated by the MIB, an organisation solely funded by the insurance industry.
Whether Covid-19 will further delay the reforms remains to be seen, but there can be little doubt that it will have an impact. It should be clear by now that there are very many substantive issues to be resolved by Ministers and officials and precious little time to do it. These are not issues to be rushed but need careful consideration to find solutions if further major problems are not to be exacerbated. We all have bigger issues to contend with right now, but for the sake of future civil justice, a botched and rushed new claims process must not be allowed to creep in whilst our attentions are so diverted.
Paul Nicholls, author of “A welcome delay” is Chair of the Motor Accident Solicitors Society (MASS) and Senior Partner at Nicholls Brimble Bhol