Managing partner David Bott responds to Aviva’s recently released Aviva Road to Reform document.
The Aviva “Road to Reform: Reducing Motor Premiums by Reforming the Personal Injury Claims Process” document states the following;
1.There has been an increase in minor bodily injury claims
2. Aviva proposes a Whiplash Treatment Pilot Scheme in which Aviva would
a. Appoint a handler to make an assessment and offer rehabilitation
b. A needs assessment report is undertaken
c. Contact with the claimant is via a physiotherapist
d. A DVD about whiplash and neck pain is sent to the claimant
e. Regular contact and targets set with the claimant
f. More serious injuries are referred for specialist treatment
The report asks that there be a legal requirement that claimants contact the “at fault” insurer in the first instance rather than the claimant be handled by intermediaries such as claims management companies and Personal Injury lawyers.
The focus of the report appears to be a wish to achieve the following:
1. For claimants to go direct to insurers
2. To move away from cash compensation and to care based remedies
3. To remove solicitors costs from the process
4. To save costs
5. To reduce claims volumes
6. To reduce fraud
Looking at the report I will pick up on some of the points raised.
A disproportionate increase in minor bodily claims.
Whiplash claims have risen even though accidents have fallen.
Most people involved in a non fault accident do not claim. Numbers have risen but we are still considerably short of everyone who is entitled to claim actually claiming.
All agree that genuine people who have been in an accident that is not their fault are entitled to claim. If via consumer awareness more do claim, well is that not merely a facet of having a well informed population.
The cost of challenging suspicious claims is more expensive than paying the claim itself
Anybody in their right mind is all for reducing fraud and punishing anyone who is attempting a fraud.
Insurers should do everything within their armoury to address fraud. The potential costs order against and potential criminal sanctions against a fraudulent claimant are there to be used by insurers.
Insurers should work more closely with claimant solicitors and claimant bodies to help us all drive fraud out of the system.
A legal requirement for motorists to deal directly with insurance companies
At this point of time insurers regularly try to deal directly with claimants. This is mainly via the insurers contacting the claimant and offering to resolve matters via a “pre-medical offer.”
these offers are invariably as low as possible and promote the very behaviour Insurers say they want to eradicate
I have seen a tenfold increase in insurers offering “pre-medical offers” to claimants.
So has this direct dealing assisted claimants? In my view and experience, these offers are invariably as low as possible and promote the very behaviour Insurers say they want to eradicate.
If an unscrupulous individual knew there was a good chance of his claim being dealt with by a phone call and no medical examination (which is the “pre-medical offer” way), is that person more or less likely to make a bogus claim.
Also, is not asking the person who is paying the money to decide how much to pay an inherent conflict of interest? Most insurer pay-outs on the lower value claims are arrived at via a computerised system, it is not beyond comprehension for the system to place values at the lower end of the scale, or for them to be discounted. Further what incentive is there for the law to evolve or for awards to increase under the proposed structure?
Interest parties and Access to Justice
Aviva say “interested parties” add cost but little value and point to statistics that Aviva pay- outs are similar if the claimant is represented or not.
from experience there is always a significant difference between a lawyer advised settlement and the first insurer offer
I have no access to the Aviva data, but from experience there is always a significant difference between a lawyer advised settlement and the first insurer offer. A lawyer is bound by the SRA Code of Conduct and is obliged to provide best advice to a client. The same obligations just do not apply to insurers.
I have a strong sense that a mechanised approach would be implemented by insurers, so what would be the chance of an unusual or non standard bespoke award being made? Little I think.
Currently 80% of Aviva’s whiplash medical reports are provided by a GP selected by the claimant’s solicitor.
This is entirely correct, it is what the RTA Protocol prescribes and each GP is bound by the BMA Code of Conduct and signs to say that they have produced the report for the Court and that they are independent.
Most Cash Compensation is not spent treating injuries
If a person has a claim as a result of an accident they are entitled to two very different “heads” of loss. The first is for their pain and suffering. The second for any money claim that they have i.e. physiotherapy, travel fares, repairs to their vehicle.
How a claimant uses the money that is for their pain and suffering is entirely up to them. It is not a windfall it is their fair and deserved compensation, The one thing they should not be spending it on (33% according to Aviva) is medical treatment or physiotherapy, as this should be part of the money claim and on top of, not included in the pain and suffering element of their compensation.
A more efficient system that removes interested parties
Reforms over the last 10 years have significantly reduced legal costs and moved some of those costs charged to the defendant for the claimants legal representation, onto the claimant.
The Fixed Recoverable Costs Scheme 2003
The RTA Portal April 2010.
LASPO April 2013
The current RTA Portal and soon to be expanded Portal are allowing claimants and insurers to move to a more efficient system. There is still every need and every benefit to a claimant to be represented.
the mechanism proposed would appear to reduce all claims rather than forensically target fraudulent claims
The cost of that representation has been reduced and the claimant is on the verge of becoming responsible for their own lawyers uplift and ATE premium (both costs were previously borne by the insurer).
A reduction in spurious and fraudulent claims
We all want a reduction in these claims, but the mechanism proposed would appear to reduce all claims rather than forensically target fraudulent claims.
Care not cash becomes the focus
The law in England and Wales is if you are injured through no fault of your own and someone else is responsible, then the law will try and put you back to where you were prior to the accident. To get a claimant back to zero they might need physiotherapy, psychiatric help and an amount to compensate that person for their pain and suffering.
So it is not a matter or focus. There should be care (via rehabilitation, medical treatment etc) and hopefully plenty of it. But there should also be compensation for pain and suffering.
For an individual to want care and compensation, is not for them to be spurious or fraudulent, it is merely them asking for what is fair and just. That is the law and that is why independent lawyers are here to make sure that their rights are justly and fairly upheld.
About The Author
David Bott is the Managing Partner of Bott and Company. He was elected to the Executive Committee of APIL in April 2006 and is the Immediate Past President of APIL, having been President until April 2012. He has been extensively involved in the MOJ streamline process and now sits on the Board of “Portal Co” as an APIL representative. He lectures on Business Management, the new process and PI Law.
David was elected to the Executive Committee of the Legal Management Section of the Law Society in April 2006. He is currently the Vice Chairman of the Legal Management Section and regularly lectures on business management, quality control and Lexcel. David has sat on the Fund Raising board and organising Committee of the Spinal Injuries Association Cornflower Ball since 2005.