Whiplash: People put off if they cannot use a lawyer
A minority of personal injury claimants, 43%, would be willing to use the government’s new portal for road traffic accident claims worth up to £5,000, a report has found.
However, three in ten (31%) said they would be put off pursuing a claim if they could not find a lawyer to help them. The portal, due to be launched in April 2020, is designed to enable accident victims to handle small claims themselves.
The report by IRN Research [1], based on responses from 503 personal injury or medical negligence claimants, found that most of them (58%) had received compensation of less than £5,000. Only 7% had dealt with a claim themselves.
There was “considerable scepticism” among claimant that insurers would pay the “correct amount” of compensation if lawyers were unable to negotiate settlements. Only 15% thought insurers would do this.
The report found that 39% completed a claim using their insurer, a third (34%) used a lawyer or claims management company (CMC) alongside their insurer and a further 18% used only a lawyer or CMC.
Responding to a new question in this year’s survey, almost half of the claimants (43%) said they would be willing to submit their claim via a portal, submitting medical reports and other documents online and handling the process “completely online”.
However, only 18% said they would be happy to take their claim through all the stages of the existing small claims process.
A third (31%) said that, if they could not find a solicitor or other legal professional to help them, “it would put me off pursuing my claim” – a five point increase on 2018.
Only a quarter of adults (25%) would be willing to represent themselves in court in a personal injury case to keep the costs down – a fall of five points from last year.
The great majority of claimants expected insurers to keep to their promise of cutting motor insurance premiums in the wake of the whiplash reforms. Only 21% said they did not believe this.
The survey suggested the clampdown on cold calling, and in particular, the Finance Guidance and Claims Act, which came into force in April 2018 had achieved only a limited impact.
Under the Act, CMCs can only contact ‘subscribers’ who have previously contacted them.
The report found that 41% of claimants had been contacted by a CMC in the last 12 months, from 48% the previous year, and unsolicited emails had been received by 22%. Unsolicited text messages also fell – from 21% to 15%.
Turning to the issue of how claimants found their legal adviser, insurance companies referred one in five claimants to lawyers, while online advertising was used by the same proportion in their search for advice – an increase on last year.
Other sources used by claimants were direct approaches from CMCs (16%), recommendations from friends and relatives (14%) and TV advertising (13%). While use of search engines declined on last year (11% to 9%), use of social media went up (8% to 10%).
Researchers said that, although there were “some doubts” about whether the whiplash reforms and increase in the small claims limit would happen on schedule in April 2020, the changes were “almost certain to lead to more restructuring in the sector”.
They expected growth in the personal injury market in 2019 to be “only slightly better” than the 2.4% recorded last year, “helped by some firms trying to complete more claims before the April 2020 changes” and bringing the total market value to £3.95bn.
“The market value could well decline in 2020 if the proposed changes take place, but there will be an improvement in 2021 and 2022.”