Claimants pursuing cases through the Official Injury Claim (OIC) portal have received £130m in its first two years – but their lawyers remain very unhappy with the system.
The government insists, however, that it is “successfully supporting claimants to register, negotiate and settle their cases”.
Today marks the two-year anniversary of the OIC going live, since when it has received more than 500,000 road traffic accident (RTA) related personal injury claims worth less than £5,000 (and £10,000 for all losses related to the accident).
Just under 120,000 having settled to date, with compensators paying out £130m.
The OIC has led to a huge fall in the number of RTA claims, with the number reported to the Compensation Recovery Unit continuing to tumble this year.
Though designed for injured people to use without legal representation, only one in 10 go it alone – although the Ministry of Justice points out that this still represents tens of thousands more than before the reforms.
A Ministry of Justice spokeswoman said: “The latest data shows that around 24,000 claims are being processed a month – proving beyond doubt that the service is successfully supporting claimants to register, negotiate and settle their cases.
“It also shows that unrepresented claimants who use the portal settle quicker than those with legal representation and receive comparable pay outs on average.”
Average settlement rate at the end of April 2023 was 265 days for represented claimants and 127 days for unrepresented claimants; the average value of a settled claim for a whiplash tariff injury was £889 and £933 respectively.
Jeff Winn, chairman of accident management business Winn Group, including well-known claimant firm Winn Solicitors, said the OIC has not achieved its aims of faster, more efficient settlements with victims at its core.
“Genuine victims of RTAs have suffered as a result of these changes, which were originally designed to clamp down on spurious claims. It may be that – in time – the OIC will face a legal challenge in the same way that the employment tribunal reforms were knocked back after being found to be discriminatory.”
He argued that the significant reduction in volumes of claims showed that the OIC “has restricted access to justice for around half the people who would otherwise receive justice and compensation”.
He continued: “The OIC system is overly complex, making the transfer of information clunky and difficult. It is far slower than the old system for solicitors and clients.
“In particular, there is no end-to-end ‘A2A’ link which would speed up the transfer of information from solicitors’ case management systems and collection of information for the OIC portal. This is unforgivable in this age as it requires everything to be manually handled and re-entered.”
Mark Savill, managing director of leading claimant law firm Lyons Davidson, said the OIC was finally a “fairly stable” platform.
“Insurer behaviour remains an issue with some rejecting rather than redirecting claims, errors on defendant details which then can’t be corrected, and insurer confusion on responsibility for multi vehicle accidents.
“It is also clear that there is some insurer gaming with disproportionate use of causation arguments, liability disputes, low-ball offers and medical fee challenges.”
Mr Savill said the biggest problem remained “frictional issues” that slowed settlement, particularly around mixed injuries.
The Court of Appeal sought to address the issue of valuing claims with both tariff and non-tariff injuries in the Rabot appeal at the start of the year, but Mr Savill described the case as “a missed opportunity for the sector to find some common ground on resolving disputed values and has slowed our conversations around damages protocols and ADR solutions”.
Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, warned that consumer awareness of the OIC remained “very limited”.
“Ministers may well see this as a triumph, but if all it means is that injured people aren’t receiving the compensation they are due because of other people’s negligence, then they might want to temper their celebrations.
“Meanwhile a source of considerable concern is the rapid contraction in the number of legal firms and others who are prepared to represent injured people.
“Wafer-thin or non-existent margins explain much of this, but it leaves those making a claim with fewer options and less protection against under-compensation by insurers who are understandably keen on their own, rather less anaemic margins.”
The Financial Conduct Authority will next year determine whether insurers have passed on the estimated £1bn savings from the OIC – or £35 per motorist – but Mr Maxwell Scott pointed out that, even if they have, with premiums rising sharply this year “this will seem like small beer to hard-pressed motorists”.
Andy Cullwick, head of marketing at First4Lawyers, argued that the claimant industry needed to come together to improve the OIC’s visibility.
“The pandemic and the prospect of reduced damages undoubtedly contributed [to the fall in claim numbers]. However, cuts to law firms’ advertising budgets and the increasing move away from mainstream platforms to more below-the-line methods may have also played their part.
“Perhaps consumers simply aren’t as aware of their right to claim these days and, if so, is it time that we, as an industry, took action to address that.
“This could take the form of a genuine collective whose sole aim is to create and execute successful marketing campaigns that reach potential claimants and inform them of their rights and routes to redress.”
The Supreme Court has yet to decide whether to hear the Association of British Insurers’ appeal against the Rabot ruling but the portal is to be amended on 14 June to take account of it. Users with mixed injuries will have to provide a breakdown of how they have come to a valuation for the non-tariff element of their claim.
Martin Saunders, head of service, said: “The revisions have passed their way through the process agreed by the Ministry of Justice and are approved by the Civil Procedure Rule Committee sub-committee and are now ready to be deployed whilst we all await the outcome of the application made to the Supreme Court.
“We believe the new wording, including amended medical instruction, will better inform all users.”