In the Media - Flawed Costs Reforms Must Be Fixed before Next Rollout

Pausing implementation of costs reforms is the right thing to do—a review of the Official Injury Claim portal should come first

The announcement late last year that plans to extend fixed recoverable costs were to be put on hold was perhaps the most sensible decision the government has made in a long time—in the context of costs reforms, at least.

The changes, which would see fixed costs applied to the majority of cases valued up to £100,000, were originally due to be implemented in October 2022 but have been postponed for a further year.

Speaking in November, justice minister Lord Bellamy told the Civil Justice Council’s National Forum on Improving Access to Justice that, with such a complex set of reforms, it was important to get them right.

I couldn’t agree more and, with that in mind, I cannot see how the Ministry of Justice (MoJ) can continue to deny the need for a full and transparent review of the Official Injury Claim portal before it attempts to ‘reform’ anything else.

‘Teething problems’

More than 18 months on from the launch of the ill-fated portal, the ‘teething problems’ that emerged soon after have yet to be resolved. Data from the latest quarter—up to the end of December—was published this month and the picture remains constant.

Despite the government’s promise of a simple and efficient system, the number of claimants able to use the portal as intended—without a lawyer—is consistently low, hovering around the 10% mark.

This is seemingly not a sign of failure, however, according to the MoJ’s own analysis of the portal’s first year of operation.

“What is important is that claimants have been provided with options as to how to achieve a proportionate outcome, regardless of the choice they make,” the MoJ said.

It has even been hailed a “cautious success”. One wonders, not only what would have to happen before the MoJ admits it is a failure, but also what its definition of success is.

Since the start, there have been concerns raised about poor marketing of the portal and whether the public were actually aware of the whiplash reforms at all. Speaking on Keoghs’s ‘Fighting Fraud’ podcast last year, partner Ben Leech said research suggested that figure could be as low as 6%.

Should they manage to find it, the portal and the guidance to help claimants navigate it has been criticised for being too complex, prompting a simplified user guide to be published early last year.

Those seeking legal help will also find their options have shrunk. Our own research for First4Lawyers showed that more than a quarter of firms previously handling lower-value RTA work found it no longer financially viable and quit the market, with more expected to follow.

Claimants hoping to resolve matters quickly will be disappointed. The average settlement time has crept up from 175 to 227 days in the past six months and is, by the MoJ’s own admission, “likely to continue to rise”.

The wait is even longer for those submitting a mixed tariff claim (those involving both tariff and non-tariff injuries, such as psychological problems or physical injuries aside from whiplash).

Despite making up around two-thirds of all cases in the portal, there is still no clear guidance on how to value them until test cases are heard by the Court of Appeal. Progress on this is slow, however, and the bottleneck keeps growing.

The government has also resisted calls for an early review of the tariff in light of recent, excessive hikes in inflation.

Resolution

I may have agreed with Lord Bellamy when he talked about the importance of getting the reforms right, but his comments on the MoJ’s analysis of the portal—a “modern, user-friendly service that has made making a claim simpler”—are at odds with the experience of every motorist or lawyer I have ever spoken to who has tried to use it.

Indeed, a straw poll of the audience at last year’s PI Futures conference revealed the only people there in support of the portal were the MoJ.

With claims volumes significantly down, there can be no doubt it has succeeded in reducing the volume of whiplash claims, but in doing so I believe it has also eroded access to justice for genuinely injured road users.

If the MoJ, as Lord Bellamy says, is monitoring the service to ensure that “it works for all”, it will address the above issues as a matter of urgency and certainly before it rolls its flawed reforms out any further.