It has been confirmed that the long awaited reforms to whiplash injury claims, which were first proposed back in 2015, will go into effect from 31 May 2021.
The reforms, which form part of the Civil Liability Act 2018, are designed to reduce the number and cost of minor, exaggerated and fraudulent road traffic accident (RTA) claims; benefiting ordinary motorists by reducing insurance premiums.
These ‘whiplash reforms’, which only apply to RTAs occurring on or after 31 May 2021, change the way low-value personal injury claims resulting from RTAs are managed.
The reforms introduce fixed tariff damages for RTA whiplash claims and increase the financial limit of claims managed through the RTA small claims track from £1,000 to £5,000. As a result, potential damage awards and associated costs for claims managed through the RTA small claims track will be lower. This change is therefore expected to reduce some law firms’ potential fees from such cases.
This has meant that legal businesses who process lower value Personal Injury (PI) claims have needed to plan for post-implementation of these reforms.
In this article we look at legal firms’ strategies to enable them to continue to add value to claimants who fall into the above category and the related online portal by the Motor Insurers’ Bureau (MIB), which has been set up to enable people injured in an accident on or after 31st May 2021 to claim through this service directly, without the need for legal assistance.
Whiplash claims portal
Firstly, a significant element of the whiplash reforms is the introduction of an online portal, set up by the MIB, which allows a person to lodge a claim for any road traffic accident related personal injury claim under the value of £5,000.
The online portal, called Official Injury Claim, is intended to be an easy-to-use and impartial service for people who have suffered injuries in a road traffic accident to understand how to make a claim, provide the required information, manage their claim and receive settlement offers.
Despite minimal public promotion of the service, the Official Injury Claim service is due to be launched on 31st May 2021. People injured in an accident on or after that date can then choose to claim through this service directly, without the need for legal assistance.
Post-reform strategies from across the sector
In a survey undertaken in December 2020 by First4Lawyers, only 18% of claimant personal injury solicitors said their firm had settled on a strategy to deal with the new whiplash reforms. This was surprising with 41% of the same respondents stating that the reforms would have a major impact on their firm. However, this may well have been the case that until there was a more certain launch date, then there wasn’t as much urgency to finalise a plan; after all, the current live date is the third delayed date proposed to implement these changes.
This month has seen more legal businesses who deal with PI claims showing their strategies, and for those embracing technology, there appears to be much more confidence in achieving a profitable way of handling lower value PI claims post-reforms.
The most significant investment has been made by the likes of Minster Law and New Law, both bringing solutions to the market that plug into the MIB portal. Their respective propositions, INK & Pilot provide their customers with a seamless process, where if a claim does fall within the £5k small claims limit, it will follow the requirements of the MIB’s small claims portal behind the scenes – and they essentially undertake all the work on their customers’ behalf.
There has also been a strategy by some firms to snap up small PI firms that have decided to sell up and exit the PI market, to achieve the critical mass to enable them to make investments like Minster Law & New Law. One such firm is Express Solicitors, known to make public an unusual level of operational detail, and in addition to a number of acquisitions, has been cited having a strategy to in-source as much as possible, including advocacy and cost collection to reduce the use of counsel.
In addition to solicitor practices, barristers have brought to market solutions to help the layperson handle small claims. One example is the Small Claims Portal – via a collaboration with Clerksroom Direct. Currently designed for general small claims, they have further innovations in the pipeline that are likely to encompass moving into helping claimants in the PI market.
Chris MacCafferty, from Small Claims Portal, said that “Major players in the marketplace are already adapting and using technology to continue supporting claimants for small PI claims. Whether there will be a need for support or whether they can turn a profit, time will tell.
Our experience in the general small claims market has shown a real need for support and innovative but profitable solutions can be created. I do not see why the PI market is any different.”
Claims management companies (CMCs) have also been planning for the anticipated reforms. National Accident Helpline (NAHL) for example, has transitioned from a CMC into a technology-enabled law firm, National Accident Law; providing an end-to-end legal service to process RTA claims, including small claims and an increasing number of non-RTA claims. Their preparation has seen significant investment in National Accident Law’s call centre technology, digital journey and customer triage processes; which is intended to be completed by 31 May 2021 to enable them to process all RTA claims – including small claims – under their new system.
For firms without the investment of the likes of NAHL behind them, and who are still looking to remain in the PI market and process these types of claims profitably, many have been looking at existing technology solutions in the market that they can subscribe to or buy into.
The inCase mobile app is one solution that integrates with most case management systems, offering an innovative way to communicate with legal clients efficiently and securely. Where, within the app there are a whole host of features including automated ID checks, documents can be e-signed and there is instant & secure messaging; all of which reduce client requests for updates and ultimately the amount of time being spent per case.
Patrick O’Hare from Paschal O’Hare Solicitors, said that “internally, the inCase app has freed up the solicitors’ time without reducing the standards of work.”
Summary
For firms who have chosen not to run down their PI departments or exit the market entirely, there is certainly confidence that by implementing suitable strategies – firms can continue to operate profitably, regardless of the value of claims. Evident by the examples mentioned above, there are plenty of legal businesses in the PI sector planning to support claimants through their journey – even when they fall into the MIB’s Official Claims Portal. The fundamental aspect enabling these firms to do this profitably and seamlessly, is through investment in technology.
And as a final thought, on 31 December 1999 we wondered whether planes might fall out of the sky as the clock struck midnight, it’s, therefore, going to be interesting to see what happens on 31 May 2021 when the Official Claims Portal switch is turned on. Let’s hope for the claimants’ sake they don’t experience a new kind of Millennium Bug!