Extracts from speech by Paul Nicholls, Chair, MASS Annual Conference, 16 October 2019
It is a pleasure to speak to you today on my second occasion as Chair of MASS. I’d like to thank you for coming today, particularly at a time when budgets are tight, and we are working under the threat of the Government’s so-called reforms.
Unfortunately, my time as Chair coincides with a period when the legal system is increasingly under pressure across multiple fronts.
Without wanting to sound too gloomy, we have the threat of fixed costs, online courts, the presence of stubbornly high court fees, a lack of judges and longer judicial waiting time, and the sale of half of the court stock leaving an insufficient court infrastructure. The legal aid budget has undergone an unprecedented period of shrinkage. And some deride the judiciary as ‘enemies of the people’ rather than just disagreeing.
Given the pressures on the legal sector, there has never been a more important time to fight for the rights of our corner of the legal world. We’ve seen it in other sectors too – notably in criminal and family law. The rights of accident victims to access independent and professional legal advice and services, to receive fair compensation, and to be treated fairly before the law are rights we need to fight for.
The threat to access to justice is very real and I can assure you that MASS will continue to campaign at every opportunity to protect the right of victims to pursue justice following injury claims – particularly road users.
We remain opposed to key aspects of the Government’s latest round of reforms, particularly the proposed increase in the small claims limit and the ridiculously low levels of the proposed tariff of damages.
Above all else though, we want an orderly claims market for the RTA victims. If the reforms are to be implemented, we want them to be introduced with minimal disruption to the claims process.
MASS has always sought to work constructively with the Ministry of Justice even when we are vocal in our opposition.
We have diligently worked with the Ministry of Justice and the Motor Insurers’ Bureau on the development of the Portal, raising issues and potential problems that need to be addressed and we have done so without too much grandstanding. holder. We’ve been there at every stage of 25 years or more of reforms, and we’ll ensure that we’ll be there for the next 25 too.
When Ministers say that access to justice is quote “at the heart of the system”, for the basis of these reforms, that is patently untrue. These reforms will create barriers and obstacles and they need to be challenged.
The proposed new claims process has morphed into something far removed from the original intention of combating fraud to a process where claimants are supposed to represent themselves, professional legal advice is squeezed and the savings are not passed on consumers but retained by insurers.
George Osborne said in 2015 that his government was “determined to crack down on the fraud and claims culture in motor insurance”.
The 2017 Conservative manifesto said: “We will reduce insurance costs for ordinary motorists by cracking down on exaggerated and fraudulent whiplash claims.”
So what are we going to have?
A new Portal with no automatic ID checks, searches and fraud searches.
This will be the responsibility of quote “representing compensators” where they exist, although it will quote “incorporate fraud reduction initiatives” such as verification of email address and identification of multiple unconnected claims from same IP address.
And an open invitation to claims farmers, both domestic and international, to directly pursue claims for the first time.
I sat in a meeting with mainly insurance company stakeholders and put questions to the MIB and MoJ about what they were going to do about fraud.
How are they going to combat the system they were developing that would see a surge of CMCs and unregulated McKenzie friends muscle in, and the fact that the very system itself would promote fraud. I was astonished to see that the insurers in the room were even more concerned than me. So why do this?
The path to implementation in April 2020 remains unclear at best.
Indeed, MASS believe that the process should be delayed if motor accident victims are not going to be protected from the outset.
As Ministers have stressed, they will not rush the process and want a quality system that is ready. We could not agree more. Don’t rush it – continue to engage with us, but don’t press on for the sake of meeting an illusory target date.
We have all heard talk of a “minimum viable product” being sufficient. That does not safeguard accident victims and fully support litigants in person. We still don’t even know what that minimum viable product is.
The new Portal must be fully fit-for-purpose and properly tested ahead of launch.
MoJ officials have, rather pointedly, highlighted that timely ministerial decisions, are necessary over the coming months to enable the remaining stages of the IT build.
The new Rules and pre-action protocol (PAP) have yet to be agreed with the statutory Civil Procedure Rule Committee (CPRC).
A likely General Election, a possible new ministerial team and the continued dominance of Brexit is unlikely to ease the decision-making process.
The regulations still need to be published and approved by Parliament.
And that’s just the timetable.
As mentioned previously, even insurers are worried about the long list of unresolved issues. The ABI also expressed concern about this.
There will be duplication problems created by dual operation of existing Portal and new LiP Portal. This was long considered the worst option, rather than full integration. This shows a lack of joined up thinking.
Then there is the discrimination against legally represented claimants who will not benefit from several facilities available in the new LiP Portal. It’s as though the development flowchart has missing parts, or hasn’t been considered. It’s simply crackers.
What will be the guidance on mixed/multiple injuries? Guidelines are compiled through Court awards and yet the College are being asked to potentially set award guidelines that have not come from the Courts.
It is still unclear what happens if a claim is complicated by disputed liability.
It is not known how duplicate proceedings will be deal with (and the significant cost implications).
It continues to look as if there will inadequate provision to support the digitally excluded.
MoJ have consistently said that the third/charity sector are being consulted about how they might support LiPs, but there is little evidence of this and major players in the sector are saying that they have not been consulted. Who is right?
There is no process to migrate claims between the current and new LiP Portal.
It’s good news that finally the Government have said that minors will be excluded from the SCT limit increase, but this is only temporary – not permanent and guaranteed.
There is still insufficient information yet available for on-boarding and training of staff with the new system.
There is apparently to be no apparent independent oversight of the new Portal (as with Claims Portal Co) with multiple sector representatives – it will be run by and for insurers.
Will McKenzie Friends will be considered “professional users”?
Questions around Medical Reports, whether self-litigants will be forced to pay upfront and the reform of the new MedCo.
It is a serious mistake that rehabilitation, credit hire and repair costs will not be integrated, creating significant loopholes.
Amongst the most concerning, there appears to be nothing to stop insurers gaming the new portal system for LiPs by simply denying liability on claims and forcing unrepresented claimants to pay costs up-front.
The list just goes on and on. And that’s the list without seeing the problems in practice.
Since we wrote to Justice Ministers in June the list hasn’t shortened as issues are resolved. It has grown substantially.
You can be certain that we will continue to press Ministers for substantive progress to be made ahead of going live with the new process.
From what we have seen so far, the new Portal will probably deal well with a straightforward claim with no special issues or disputed liability.
But if one or more of a myriad of problematic issues arise, the system as currently designed will falter. That is not a good outcome.
No-one wants a system that will create further problems, is expensive to retrofit, potentially opens the door to more fraud and lets down claimants.
Nothing MASS has heard on the reforms leads us to believe that the Portal and it’s work processes are in any way ready.
Then we have the proposed tariff of damages and the proposed increase in the Small Claims Limit.
Has the Lord Chief Justice been consulted, as per the Act, on the proposed tariff rates? What is that process? Will it be made public? How will differences between Ministers and the Lord Chief Justice be resolved?
MASS has sent a Freedom of Information request about the tariff system – we asked where their figures came from. The answer we received was ‘real life data’, Judgments and the Judicial College Assessments. We then asked who came up with the figures – because they’re nothing like the Judicial Studies Guidelines or Judgments and told ‘analysts’ and ‘MoJ officials’ decided them. Who are they? Why are they better than the Judges? We’re not happy with that response, and we’ll be taking it further – we’ll also be publishing the FOI request and answers.
I can also announce today that, whilst there may not be a full public consultation on the appropriate levels of the tariff, MASS is very shortly going to be responding with our own analysis.
It is the view of MASS that the tariff figures are arbitrary, ridiculous, and have no bearing on ‘real life data’, judgments, or the guidelines set by the Judicial College.
And we shall be making that case rigorously in the coming weeks. We must take action.
According to the original consultation, the reforms would capture whiplash claims with a value of up to £4,350 – within the proposed increase of the small claim limit to £5,000.
In reality however, the increase in the motor small claims injury limit will capture claims with a current value of £7,000 – for a 19 to 24 month injury – significantly above the proposed £5,000 small claims limit.
The combined effect of the tariff and increase in the SCL:
- The tariff reduces the value of a two-year injury from £7,000 to £3,750.
- The SCL is increased from £1,000 to £5,000, bringing a two-year injury within the limit.
The effect is that the reforms capture cases currently worth £7,000. The scope of this change is far greater than envisaged or ever discussed. This is ludicrous and unfair.
Injuries at that level generally involve a number of medical consultations, extensive treatment, and pain that lasts for 2 years. The unintended consequence of the reforms is that these individuals, whose claims cannot be considered “low-value”, will be caught by the reforms and left without legal assistance.
One of the key sections of the Civil Liability Act is the banning of pre-medical settlements, which we strongly supported.
Why then is it that some insurers are still offering significant numbers of pre-medical settlements?
We’re constantly hearing that lawyers are gaming the system for their own advantage.
Why is the ABI not getting its own house in order?
It is rank hypocrisy.
The practice is going to be banned, so why continue to do it.
I call upon all insurers to stop making pre-medical offers now. There is no need to wait for the legislation to be implemented. You should adhere to the spirit and letter of the legislation.
So, in summing up, it has been a long road to this point.
There is still time for us to have a real and meaningful impact upon the final outcome for motor accident victims.
I can assure you that MASS will continue to actively campaign at every opportunity, representing our members at the top table, to try and ensure that the current reforms are fairer and more reasonable.
I hope that you enjoy the rest of the conference.