Go on the ‘B’ of the Bang
The OIC portal arrived with more of a whimper than a crescendo.
There was no stampede by unrepresented claimants to submit their claims. The portal support call centre was not overwhelmed with requests for help. Insurers were not harangued with queries from unrepresented claimants about processes and claims management companies did not flood the system with new notifications.
In fact, it was really a rather sedate start to the most important regulatory and structural changes to road traffic accident injury claims for a generation.
Indeed initial claims notifications were low, presumably driven by accident date commencement, but also by A2A and other technical glitches experienced by some claimant representatives.
And there may be other reasons for the slow burn and reporting delays. Claimant representatives are familiarising themselves with the process, but it might also be that claimants are being advised to wait and see how their injuries resolve so as to maximise the amount of compensation to be recovered. Part of this would be to use rehabilitation treatment to manage prognosis recovery periods which, when the claim is ready to be submitted, may drive claims inflation and maximise revenue streams.
The portal has been built to process over 150,000 claims a year and the volume of claims submissions is steadily increasing and is expected to ramp up significantly in the next few weeks and months.
But, in the meantime, what can we report on the early days of the OIC portal?
To be or not to be represented?
Although designed and built for a claimant to use without representation, the initial volume of direct unrepresented claimants has been low. A lack of a publicity campaign to promote the new claims process may explain why, but legal and other representatives were never going to step aside and forego revenue even if costs are excluded and the level of whiplash compensation is calculated by applying a tariff.
Estimates of unrepresented claimants have been in the range of 5% to 15%, with some insurers reporting higher but others reporting significantly lower.
As more representatives capture claims and make submissions, the volume of unrepresented claimants is unlikely to increase and indeed may be even less than these initial volumes. New legal expenses policies and damagesbased agreements will drive representation and reduce the number of direct claimants washing claims through the portal.
Even though an unrepresented claimant is able to use the Guide to Making a Claim, the system is not as user-friendly as intended. It is not without complexity and the legal treacle of proving an uplift on the tariff amount or valuing combined whiplash and non-whiplash injuries may be too onerous for an unrepresented claimant to take on.
Time will tell, but with claimant representatives having invested heavily in technology and automation to process claims it is very unlikely that the volume of unrepresented users of the portal will ever reach the volumes initially envisaged by the MOJ.
We are all exceptional, aren’t we?
Of course we are, or at least that is what we are all led to think these days including how severe a whiplash injury can be and what exceptional effects it can have on our circumstances.
Estimates of initial claims for a tariff uplift are between 30% and 50% and the fact that the system signposts a claimant to make a tariff uplift claim makes it inevitable that unrepresented claimants will seek an uplift up to 20%, but also that some claimant representatives will attempt to build their processing models to include such a claim to maximise compensation. Even such a subjective test will need some evidential parameters (for both limbs of the test) to be set out by the judiciary and if or when it starts to gain traction, all claimant representatives may fall into line and frequency will increase. Where that evidential bar will be set remains speculative at this stage. In the meantime, insurers and other compensators should take a hard line and not accept and pay uplift tariff claims unless they are very compelling.
Test and trace
Insurers have reported wide-ranging levels of hybrid claims, those where a whiplash tariff injury has been suffered in conjunction with a non-whiplash injury that is often minor in nature. Never before has the valuation of compensation for a tariff and common law mixed injury claim been considered in law. This is the challenge for both claimants, their representatives and insurers, and the selection of claims to be presented to the Court of Appeal to provide guidance on the correct valuation approach will kick off shortly, even if a decision could be some 12 or 18 months away.
The tracing of suitable claims will be very important to ensure a wide range of non-whiplash injury types are chosen to be tested, but what about in the meantime? The quandary for the claimant representative is to balance a quick settlement of a non-fault claim whilst not undercompensating the claimant. The challenge for the insurer or other compensator is not to over settle and create a handling precedent for future claims. There may be room for a commercial approach on both sides and if collaboration can be achieved (subject to any critique by consumer groups about anti-competitive practices) then it may help to avoid latency in the claims process.
The devil is in the detail
Some insurers and compensators have reported incomplete mandatory information fields on the Small Claims Notification Form. This might be a system glitch which allows such a field to be populated in any manner so the notification can be submitted on the system. Whether this is a deliberate tactic by claimant representatives or whether it is a symptom of hurried claims triaging remains to be seen, but it presents a challenge for compensators, especially the MIB, in validating claims and investigating them within the 30–40 day liability response period. Insurers may find claims reassigned to them by the system with little time left to investigate and respond on liability as the 30–40 day period is, in effect, a hard border. The absence of full driver names, properly completed vehicle registration numbers and accident details populated on the SCNF needs to be monitored, and insurers have from day one already passed claims to their validation and counter-fraud teams.
Not the boy band, but rather the issues created by the OIC portal system linking to the Motor Insurance Database. Whilst sign-up to the Memoranda of Understanding has been encouraging, the manual completion of forms is proving to be cumbersome and not all insurers are reaching an agreement as to who should respond to the claim when there are multiple MID entries. Any digital solution from the MIB will not be ready for some time and, in the meantime, the reassignment and reallocation issues which are emerging will remain problematic and impact operationally, especially for insurers providing niche policies such as by miles or short fixed-term cover. Hopefully insurers will collaborate to avoid redirection issues again driven by the 30–40 day time limit to provide a liability response, but differences are likely to remain for the short term.
A different way
Despite originally being one of the centre-pieces of the reforms ADR was stripped out of the process due to the need for primary legislation and the fear of imposing a binding, but non-judicial decision on an unrepresented claimant. However, with the average listing for a small claims track court hearing being in excess of 53 weeks, even before the portal went live, some insurers and claimant representatives were looking at alternative dispute resolution to determine liability disputes and even to assess the value of a claim where there was a non-whiplash injury. The appetite of insurers to resolve portal claims this way needs to be carefully managed so as not to drive wrong behaviours. Latency on the portal will have an operational impact and have a knock-on effect on claims experience for insurers and their customers and this will need to be balanced against adverse liability decisions and claims inflation that may be a consequence of an ADR approach.
No turning back
The OIC portal is live and here to stay. Eventually government will turn its focus to the second tranche of personal injury reforms including the industrialised provision and costs of rehabilitation treatment driving up average cost per claim and motor premium costs for consumers.
But, before this happens, horizon scanning for predicted patterns, trends and behaviours from represented and unrepresented claimants across portal claims will, over the next few months, be corroborated by data and management information. Data analysis will be key to understanding claims spend inflating behaviours, which in turn will drive benchmarking, avoidable litigation analysis, and know your opponent and handling strategies for insurers and other compensators.
In the meantime, during the infancy of the portal process, insurers and their legal advisors should collaborate closely to gather intelligence, understand initial behaviours and work together to implement solutions for emerging and ongoing issues. The early days of the portal are just a precursor of what is still to come, and what undoubtedly is a step change in the handling and processing of simple volume motor personal injury claims.