Buckland: Whiplash reforms have held down motor premium rises

Buckland: Reforms were needed to stop unmeritorious claims

Insurance premiums would have risen even more without the whiplash reforms of 2021, according to the former Lord Chancellor who presided over their introduction.

Sir Robert Buckland MP also indicated that widespread reform of clinical negligence cases – though much talked about in government – was unlikely to happen.

Speaking at an Association of British Insurers event this week on the future of civil justice, Sir Robert – who was Lord Chancellor from July 2019 to September 2021 – said: “I’ve no doubt that increases in insurance premiums that we’ve seen in the last year in these inflationary times would’ve been more acute without the changes that we made to whiplash claims.”

His comments were backed up by Lee Watts, director of technical claims at Allianz, who told a subsequent panel debate that motor insurance premium rises were being mainly driven by vehicle repair costs, with the Official Injury Claim (OIC) portal “mitigating the impact”.

Sir Robert cited the reduction in the number of whiplash claims as a sign of success of the OIC. Asked by Legal Futures why, and whether it could alternatively be a sign of denial of justice, he explained that a policy objective had been to stop unmeritorious claims.

“I’m not going to point the finger at people, but we do know that there was certainly a period where we were getting an upsurge and an uptick in claims that were, if not fraudulent, then should we say on the edges and sometimes over that edge too. And that’s not a system that we’d want to encourage.”

Asked also by Legal Futures if he regretted not following through with having alternative dispute resolution as part of the OIC – as had been originally intended – Sir Robert said that “in an ideal world” he would like to have seen it but that it was important to get the portal up and running.

“But I think if I was still there, I would retain an ambition to vary the service further to allow that stage to come in. But I understand it is often governed by technological restraints and you can’t build Rome in a day.”

He spoke more broadly about the importance of ADR and welcomed the Ministry of Justice’s (MoJ) decision to introduce compulsory mediation for small claims valued up to £10,000, starting with specified money claims.

He pointed also to two current bills going through Parliament that could increase ADR: the Digital Markets, Competition and Consumers Bill – which heralds the potential expansion of ADR for consumer disputes by accredited providers – and the Renters Reform Bill, which would create a new Private Renters Ombudsman.

On clinical negligence beyond the move for fixed costs in cases worth up to £25,000, he recounted “having been there in the room with the then health secretary and other members of cabinet talking about clinical negligence reform”.

Sir Robert continued: “I can tell you that it is, as we all know, a very, very old chestnut… The options are either wholesale tort reform, which lawyers like me suck their teeth at, or a package of reform that will end up with some claimants losing out.

“And that’s politically very difficult, which is why I think we should always take lofty claims of reform to clinical negligence regimes with a large pinch of salt.”

Speaking on a subsequent panel, Steve Jarman, deputy director for civil justice and law policy at the MoJ, explained that a lot of activity was underway to introduce compulsory ADR for small claims, including talking to HM Treasury to secure additional funding, working with HM Courts & Tribunals Service to recruit and train mediators, and looking at “nuts and bolts” issues such as having the systems to effectively manage and allocate cases.

Looking to future reforms during the panel debate, Mr Watts questioned whether the Judicial College Guidelines for damages and the OIC tariff, with the latter due to be reviewed next year, should automatically increase, given “the current environment”.

If they were to rise, he went on, the question then was what methodology should be used: the retail prices index, as in the past, which was “kind of an outdated approach”, or the consumer prices index. In September, the former was 8.9%, the latter 6.7%.

“And then also should there be a different approach for below £10,000 type claims, for example?”

Increasing damages would increase the number of claims no longer falling within the small claims track or OIC portal, so he suggested that the track limits should be index-linked too,

Giving the claimant perspective, Donna Scully, a director of Carpenters, said the priority should be on getting the portal working better first before considering developments such as mediation.

She pointed to last month’s report of the justice select committee on the OIC, which she described as “pretty blistering about things that are wrong with the portal”.

There was a huge backlog of cases, Ms Scully went on, settlements were taking twice the time they were in the old portal and the regime was set up for litigants in person (LiPs), when only 2-3% of claimants were genuine LiPs.

Around 10% of OIC claimants are listed as LiPs, but Ms Scully said most had third-party assistance through an insurer.

Litigating was “too complicated” as well, with issuing not working: “It’s taking five months to get a notice of issue.”

And when they reached court, the few cases that litigate have been “quite bloody” and almost as complicated as multi-track trials, she said.

More positively, Ms Scully said that more than two years since the OIC’s launch and 31 updates later, her firm finally has an A2A (application to application) connection with the portal.

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