After several years of fundamental changes to the way that personal injury claims are dealt with, this article is written to provide a sense of where we are, how we got here and query whether ‘here’ is in fact a good place to be.
Firstly we need to look at the reasons for the root and branch changes over the last five years. On the face of it the main two drivers by Government appear to be a wish to reduce fraud and a wish for us all to have cheaper car insurance premiums.
The changes that have been made to achieve these two goals are:
- 1. Making an RTA portal in April 2010 (for accidents up to £10,000)
- 2. Introducing fixed legal fees for portal matters in April 2010
- 3. Extending the portal in April 2013 to include RTAs up to £25,000 and non RTA claims up to £25,000
- 4. Reducing the fixed fee system by over 50% in April 2013
- 5. Introducing fixed medical fees for initial whiplash medical reports in October 2014
Has the Portal achieved what it set out to?
Before considering whether the Portal has achieved its aims perhaps we should pause to consider the aims themselves: When it comes to reductions in insurance premiums, the government has no control over this. My question is why make something uncontrollable, one of your key points? The government might implement all of the measures known to man but it remains that the output chosen is one over which the government has zero control. And if the government does in fact insist on making it one of its key points, surely that then makes them at least to some extent beholden to the insurance lobby to deliver on the government’s promises?
That aside the decision has been made and the new portal process now handles over 90% of all PI claims in England and Wales and has substantially reduced the costs of these claims.
It appears that what has happened is that the majority of costs saved by the insurers have been loaded onto the individual innocent claimant.
All claims come through one centralized point, allowing insurers to apply lean and efficient claims processes to all Portal claims. It appears that what has happened is that the majority of costs saved by the insurers have been loaded onto the individual innocent claimant. This has led to huge savings for insurers who have not necessarily passed on these savings to consumers pound for pound on premiums. What we have not seen is a drastic reduction in insurance premiums, nor any abatement of the continued cries to reduce costs further.
So if insurance premiums do not go down, who will the government and/or insurers blame next? Will they always find yet something else to blame premium rates upon, such as a spike in birth rates? Or will they blame claimants, claimants’ solicitors and fraud?
The Portal’s other aim was to reduce fraud: Whilst there is no level on which you can argue against a reduction in fraud, can we at least agree on how much of it there is?
Insurance figures appear to show fraud everywhere, whereas a recent study by Thompsons Solicitors appears to show that it is minimal. I would welcome an industry agreed statistic so as to ensure that there are no allegations of the figures being biased or self-serving on either side.
Agreeing on fraud levels is a vital first step to enable us to measure any reduction, assess our progress and evaluate whether the changes that have been implemented have had an effect. Unfortunately the day that a method of measuring fraud is agreed upon remains a long way away.
The reforms continued…
The next area to receive scrutiny was medical reports: Again there was yet more clamour to reduce costs and concerns were raised that report quality was not high enough and that there was not sufficient distance between those who instruct and those who prepare reports.
The upshot was that medical fees have also now been fixed and a mechanism will be put in place to prevent medical agencies and those that instruct them being connected.
Let us put this move into context with some history: A considerable period of time ago (2007) the Association of Medical Reporting Organisations (AMRO) agreed voluntary rates with insurance companies with regards to medical reports. Whilst these were non-binding on organisations, most mainstream organisations did abide by the AMRO rates with only a small minority operating outside the agreed rates meaning that, in effect, fees for whiplash medical reports have been essentially fixed for some time.
A Standard GP report had a standard recommended fixed cost of £225. The government has now looked at this recommended rate and decided to choose a figure of £180 for a GP report and enshrine that figure in the Civil Procedure Rules.
A reduction in costs often goes hand in hand with a reduction in quality, so to endeavour to avoid this, the government has decided to introduce a new accreditation scheme for professionals producing whiplash medical reports.
Until Summer 2014, the industry stakeholders from all sides seemed to have reached a satisfactory consensus that the key to improving quality of medical evidence was the introduction of a new accreditation scheme, backed up by a robust process of audit and peer review. Despite this clear agreement, from nowhere the government announced this wasn’t enough and to ensure independence, were going to look at a new random allocation process. The organisation tasked with creating the database of interests and supervising the random allocation process, thereby maintaining the independence point, is MedCo. MedCo is intended to become a new central hub for doctors and medical reporting agencies, yet, as I have said, how this body arose and how the cab rank will work are both far from clear.
The proposed mechanism to remove any concerns over the independence of experts and those that instruct is to introduce a two tier system:
- 1. Solicitors cannot instruct anyone (a doctor or an agency) who they are connected to.
- 2. A cab rank system will be introduced. (random allocation)
The thinking behind this is that it will avoid the perceived bias that some feel currently exists in the medical reporting system. This is despite the fact that every doctor currently provides reports in accordance with CPR35, which states they are providing the report for the court and not for the claimant. Further, it is important to note here that the volume of cases that are dealt with by solicitors who are connected to a doctor or own a medical agency is a very small % (<15%) of the overall market.
Independence can be achieved merely by making sure there is no connection between the medical reporting company, the party that instructs, and the specific expert.
In my view, independence can be achieved merely by making sure there is no connection between the medical reporting company, the party that instructs, and the specific expert. This is easily achieved, and I believe will be achieved by MedCo so why there is a need for a cab rank system is beyond my ken. To me it would seem to produce more problems than it solves.
Will claimants be better off under the random allocation process?
The new random allocation process looks likely to be administered by MedCo. The question is how will this be done and will it be fair?
Under today’s system, my client can choose their medical practitioner and the time/day of their appointment. They can choose to have a female doctor, to have a weekend appointment, or to fit their appointment around childcare; it has evolved to become a very consumer-centric process. My firm can send and receive instructions and reports to and from our chosen medical agency using secure IT links. I have confidence that my chosen medical supplier will handle my client’s sensitive data properly and securely, and I know that the requested medical reports will be produced within agreed timescales, something that is central to the economics of our business model in a fixed fee world.
Yet there is a very real doubt that if the random allocation process via MedCo does happen then this consumer outlook and slick operational process will be materially impacted and not in a good way. Fundamentally the client (and their representing solicitor) will all of a sudden have almost no input into when their appointment takes place, who the doctor is that is preparing the reports or how long it will take to be produced. And in the meantime, how is my client’s data being stored and handled? I have no idea as the medical agency or doctor allocated to me may be someone I have never come across or used before (perhaps deliberately).
Common sense suggests this change is unnecessary at best and ludicrous at worst. As the old adage goes, if it ain’t broke, why fix it? It works well at the moment and is geared towards matching the client’s reasonable needs with a known and measurable service level. We appear to be moving the selection process from one side of the fence to the other entirely in order to address what is no more than a perceived issue that might exist in a minority of cases. The phrase “baby out with the bath water” comes to mind.
My concern is that this move will cause GPs to change their approach completely, switching to an interrogative style of founded in mistrust from the off with “did you really feel that?” type questions. It seems contrary and the total opposite to what it is that we want to achieve. Does this signal a move towards the benefits agency style situation? The type where you are reviewed by an independent person and given a yes/no answer as to your entitlement to DLA, with little empathy nor sympathy for the individual; a process whereby the injured party is merely a widget in the process?
Under the current system if for whatever reason you do not agree with the report, you can seek another (on the understanding that they will have to pay for the additional report) as privilege applies. Under the new scheme what would be the incentive for medical practitioners to give a good quality report? They would, by the very nature of the scheme, percolate to the front of the line in any event.
What level of complaint would it take to get a medical practitioner removed from the cab rank system if their reporting was not up to standard? Would a sub-average report be enough or would they have to do something drastically bad? This ultimately all leads to a drop in quality for injured parties. For that matter, what is the accreditation process? What sort of additional credentials will be required to justify this upheaval?
It could easily be argued that the new system has been developed as a mechanism for cheaper insurance, not for client care.
It could easily be argued that the new system has been developed as a mechanism for cheaper insurance, not for client care. If we were seeking a truly fair and correct route to compensation for people then surely you wouldn’t choose this system, would you?
The government is likely to implement all of these measures but the fact remains that the two outputs upon which this scheme will be measured against are fraud and insurance premium costs. For the first there are no agreed statistics and the second is outside of the Government’s control – so let’s not be surprised if no one can say if it has served its purpose! There are certainly no published goals by which the success or otherwise of MedCo and random allocation are to be measured.
This poses the question: Why do we need a cab rank system at all? In my view what we should be aiming for is a system that means we get fair, honest and quick reports that are cost effective. The latter certainly seems to have been achieved – at a now fixed cost of £180 – and everything else can be achieved through the existing process, supplemented by a sensible and robust system of accreditation, audit and sanction for sub-standard expert / organizational performance.
Have we got the best solution to the supposed problem?
I am firmly against this proposed change but understand the actions of some solicitors and others of their ilk have raised some questions. What then would be my recommendation?
1. I think a fixed fee for medical reports is sensible and if the cost for that is to be £180 then so be it (although I have seen nothing about how it was calculated).
2. I think putting a mechanism in to protect the independence of experts is equally sensible.
3. I think accreditation can be no bad thing; after all, nobody can be opposed to ensuring high standards of medical practitioners. However I would be surprised if the new accreditation scheme would rule out anyone who is already able to conduct reports given that they already need to be registered GPs and adhere to the strict code of conduct of the GMC.
But a random allocation process?
What we should be aiming for is a system that means we get fair, honest and quick reports. All of this can be achieved through the existing process. This therefore raises the question: Why do we need a cab rank system at all? What is achieved by it and what extra does it give to my three points above?
As far as I can see the cab rank simply serves to:
- 1. Add friction & inefficiency to the process
- 2. To confuse
- 3. Add more costs to the process
- 4. Impede claimants3. Add more costs to the process
This proposed new system would certainly not benefit the represented client. It would only be of benefit to someone who is ignorant to the entire process such as a litigant in person.
My concern is that this issue is a defendant beachhead and that you will soon have a process that is dominated and controlled by insurers. I can envisage a fixed tariff (determined by the insurers), data will then be inputted onto the Portal where you will simply get a yes/no decision and in effect the entire process will become automated.
The process will no longer require a solicitor, merely the client and insurance company as the Portal will be used for the third party capture of information. To what extent then will clients need a lawyer to represent them?
This is not only a concern for those of us working in the industry; it is a concern for injured claimants. Under an insurer-led automated process, where would the incentive be for insurers to get it right? Who would be the gatekeeper under this system? There is a need for both solicitor and insurer in the process to prevent either party from becoming the dominant force, in order that clients receive a fair deal.
Let’s take this back to the start of the article and the aim of all of this industry upheaval: Even after all these changes, as I write this, I am still waiting to see when it comes to a reduction in the cost of insurance. As for the level of fraud, well, are they bipartisan agreed statistics?
About The Author
David Bott is the Senior Partner of Bott and Company. He was elected to the Executive Committee of APIL in April 2006 and is a Past President of APIL, having been President from April 2011 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 and is the Portal Co claimant representative on the Behaviour Committee.
David was elected to the Executive Committee of the Legal Management Section of the Law Society in April 2006 until 2013. He has been 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.