This article first appeared in The Expert Witness Journal (Volume 1 Issue 23 – Spring 2018)
The worst fears of personal injury claimant lawyers have been confirmed. Despite all the arguments and discussions, and the efforts of many in the sector, Government Ministers remain wedded to a package of so-called ‘whiplash reforms’ that unfairly penalises all accident victims and which will particularly adversely impact already vulnerable groups. Virtually without amendment from the abandoned legislation from last year, for good measure, the recently published Civil Liability Bill even throws in a new mechanism to determine the future discount rate for those most seriously injured.
Beginning in the House of Lords on 24 April, the legislation is apparently scheduled to receive Royal Assent towards the end of the year, before being implemented in April 2019. Or perhaps not. With resistance growing in the Commons and a restless House of Lords frustrated at having been neutered over Brexit, its path to reaching the statute books may yet not be as smooth as the Government’s business managers would certainly like. The other element of the Government’s package, raising the Small Claims Limit to £5,000, does not require primary legislation. The Justice Select Committee, who conducted a short inquiry into this completely unjustifiable proposal, may yet provide overwhelming reasons why this should not proceed as planned.
In many respects, the debate has moved on considerably since the plan to effectively outlaw whiplash as an injury was first revealed in November 2015. The original proposal to effectively ban the right to damages may have been dropped, but a combination of the proposed ridiculously low fixed tariffs and an unjustified 500% increase in the small claims limit, will severely limit the right to damages anyway. Ministers’ views remain stubbornly wedded to some basic concepts that should by now have been consigned to history.
First, there is the level of fraud. Originally the backbone of justifications for the reforms, the Government have largely sidestepped this issue by simply not mentioning it, faced with the uncomfortable truth that they have little or no evidence of widespread fraudulent behaviour. When pushed, however, one Justice Minister still displayed the old bankrupt argument, suggesting that “many” of the low value RTA claims are fraudulent. Whilst we fully acknowledge that fraud is a continuing problem, we do dispute that a high, or even significant, proportion of claims are fraudulent. Even the ABI have acknowledged that incidents of proven fraud account for just 0.25% of motor claims. Adding an uncertain, and disputed, amount for suspected fraud, where a claimant accepts a substantially reduced settlement in respect of a claim, for whatever reason. Just about everyone acknowledges that fraud is probably less than 3% of all motor claims. Even Aviva, who have vociferously campaigned for the Government’s proposals, have reported fraud as being in the region of 1 to 3% of claims. The fact is that the so-called reforms should be proportionate to the scale of the problem. If the level of fraud is so low, then the majority should not be made to suffer from being effectively prevented, and certainly dissuaded, from seeking justice and compensation for their injuries.
The second area frequently cited is the number of accidents versus the number of claims. The Ministry of Justice continues to be keen to emphasise that the number of reported serious accidents has continued to fall, highlighting that cars are now considerably safer. The figure frequently used is that reported RTAs have fallen from 190,000 in 2006 to around 142,000 in 2015, but yet the number of claims has not fallen by a similar proportion. According though to the Department for Transport, around 187,000 casualties are reported by the police each year and recorded in the official National Travel Survey. We absolutely applaud the drop in fatal or serious accidents, but the fact remains that there are still hundreds of thousands of lesser, more minor injuries suffered each year. The latest estimate from the Department for Transport is that there are 670,000 people injured in RTAs each year, and that 483,000 casualties are unreported per year.
On the number of claims, this figure continues to be hotly contested. Insurers and the Government tend to focus on the number of Claims Notification Forms (CNFs) submitted, which we accept do not show a consistent pattern of year on year decreases, although analysis from BLM, a defendant legal firm, shows that CNFs declined by 10% in Q3 2017 from the previous year. However, the number of CNFs is only part of the picture, including as it does duplicates and other statistical and administrative anomalies. It always should be contrasted with the number of claims that are pursued successfully, which is surely the only number that really matters. The CRU figures on the number of claims settled does show a significant decrease over recent years. Portal figures certainly show a decrease in RTA claims, of which a high proportion include whiplash.
A third argument still deployed is that RTA claims are simple cases to process and can be conducted without legal representation. Whilst RTA claims are clearly not amongst the most complex of legal cases, to untrained LIPs unfamiliar with the process or the workings of the Road Traffic Act, they will still appear bewildering and labyrinthine. Even for lower value claims, the process can be confusing and complex. Even if LIPs understand that they need to submit a claim via the proposed new LIP Portal and are able to find it amongst a myriad of likely listings by CMCs, who will flood the new process, for their claim to stand any chance of success, they will need to perform a detailed series of steps – customer validation, fraud checks, liability assessment, deployment fault, deployment non-fault, assessment of vehicle damage, uninsured loss and personal injury. The system will need to access a range of data from different databases. They may need to navigate a case involving a liability dispute, allegation of contributory negligence, dispute over causation, allegation of fraud or fundamental dishonesty. They may need to approach witnesses and gather evidence, deal with expert engineering reports or expert intelligence reports. With many cases falling between the two, with liability not denied but equally not admitted for some time, will the LIP be left in limbo before paid legal representation is permitted or paid for by the Defendant? All whilst they may be recovering from a traumatic incident that may have left them injured and unable to work.
Few claimants would be aware of subrogation rights and may settle claims for their own losses without realising that they also have an obligation to recover sick pay advanced by their employers or payments made by their private health insurers. Most will not be aware of the possibility of waiting for a prognosis period to expire before settling their claim. Some will settle their claim only to realise that they have been undercompensated. Claimants will not be aware of the approach to quantification of special damages, for example loss of earnings and care. There is also the thorny issue of fees. It is not clear yet who will pay for the DVLA fee, GP report, a consultant report, issue fee, application fee, hearing fee, policy report, medical records and the costs associated with accessing the Motor Insurers Database and askCUE PI.
Of course, the likely result is that LiPs will effectively be forced to use CMCs to navigate this process, no matter how good the LiP Portal is, losing part of their damages in costs. This will undoubtedly lead to an increase, rather than a decrease, in the number of claims. Operating at a much lower professional standards threshold than solicitors, this will be a retrograde step. There will likely be an increase in fraud, as CMCs do not have the same professional obligations to assess the validity of a claim before bringing the case forward.
The reality is that after more than two years of consideration and debate, the evidence base is still disputed, unreliable and in some areas is completely speculative. There is still no answer to some fundamental questions that will have a serious detrimental impact upon access to justice. MoJ simply does not know what the full impact will be upon the claims process and the various consequences of the proposed changes.
MASS does not think that it is acceptable that public policy should be developed on the back of insufficient evidence and supposition. Regulation should be proportionate and based on clear and reliable evidence, rather than relying upon assumptions of the consequences and a “wait and see” approach. The measures included as part of the Civil Liability Bill are unfair, certainly disproportionate to the highly disputable ‘problems’ they seek to address and are destined to fall far short in some of the Government’s objectives. We must hope that, after closer scrutiny, parliamentarians conclude that there is a fairer way to deal with motor accident victims and that a more reasonable approach to tackling fraudulent claims is both possible and desirable.