Market round-up: December 2021
To nobody’s surprise whatsoever, the first data released by the Official Injury Claim (OIC) portal showed that almost all injured people using the system designed for use without a lawyer are… using lawyers.
Just under 10% of the 45,718 claims registered in its first three months were brought by litigants in person (LiPs). Word is that the Ministry of Justice was expecting about 30% of users to be LiPs but even that extremely modest target is a long way away.
Speaking at the Motor Accident Solicitors Society’s annual conference in October, David Parkin, the deputy director for civil justice and law at the Ministry of Justice, said: “What’s important to government is that, if you wish to represent yourself on the OIC, you can do with the guidance and the design of the system.”
Many who have tried to wade through the 64-page user guide would question that and it is too soon to draw conclusions from the fact that almost all of the small number (436) of settlements in the first three months were reached by LiPs. Is it that consumers just want to get it done, or maybe they are under-settling the non-tariff elements of their claim? Or perhaps lawyers just take too long?
What also to read into the fact that LiPs were more likely to receive a full admission than represented claimants – 95% to 84%. Similarly, while 11% of represented claims received a full denial of liability, the figure was only 2% for LiPs. At least we are not seeing the mass denial of liability that some had feared, although such obviously abusive behaviour would not have been a smart move by defendant insurers. In any case, it is valuing claims that is the trickier issue in motor claims than liability.
However, there has been talk of some insurers trying to make claims uneconomic for claimants by issuing part 18 requests for further information or requesting medical records, as well as insurers making pre-medical offers for non-whiplash injuries – which are not covered by the whiplash ban.
The figures did at least allay concerns that claims management companies would swoop in to represent injured people, as they were responsible for only 101 of the claims. But there is plenty of time yet.
A third of the claims were covered by the whiplash tariff but 61% were ‘mixed’ claims that also include non-whiplash injury. The plan is to expedite test cases to the Court of Appeal for guidance on how these should be handled, but there is still no timeline and this is going to block the system for some time.
There have been reports that some major claimant firms have been absent from the portal. Is this because of technical problems with the A2A (application to application) connection between firms’ systems and the OIC or, as suggested by one leading defendant lawyer, tactics?
Kennedys partner and motor claims specialist Ian Davies said on a webinar I watched that there was some cynicism from the defendant side when claimant solicitors blamed technical issues.
“While there may be some truth in claimant solicitors struggling with the system, I think there is a chance it could be more tactical than that,” he said.
The way the compensation tariff was structured – bands based on the length of time the injury lasts – meant there was “an opportunity for claimant firms, if they so wish, to sit on a claim for a few weeks or months. By the time the claimant has gone for a medical, they have moved to a new band”.
Mr Davies suggested that, on one analysis of Kennedys’ data, this theory could be supported by the fact that LiPs were far quicker to submit their medical reports than represented parties.
So, what else have we seen in personal injury since my last round-up? The acquisition of Fletchers Solicitors by a US private equity house, with the aim of executing a ‘buy and build’ strategy, marks the latest consolidator to enter the market. Those with good businesses looking to sell have an increasing number of options.
A report for the Association of Consumer Support Organisations said reduced road traffic accidents and personal injury claims as a result of the pandemic boosted the profits of motor insurers by £3.3bn – the Association of British Insurers countered that its premium tracker showed the average cost was at a five-year low and fell by £38 in the first half of 2021.
A mystery shopping report by customer experience specialists Insight6 reflected the findings of First4Lawyers’ white papers over the years that “basic and avoidable errors” are causing a breakdown of the customer journey and potentially lost business.
For example, mystery shoppers – who went through the full customer journey of a new enquiry in various consumer law areas, including personal injury – found that more than a third of email enquiries (37%) to law firms received no reply at all.
The report said: “Most alarmingly, only 43% were reported to be well-written and grammatically correct. Particularly noteworthy was the difference in the use of jargon. While legal firms manage to keep their phone conversations jargon-free (95%), email communication was jargon-free only 65% of the time.
“Something is going wrong for legal firms between phone and online interactions. Their well-honed skills of speaking plainly on the phone are often lacking when communications begin online.”
Jonathan Winchester, chief executive of Insight6, said: “What is interesting is that it is not the complex nature of the job, or the expertise required that is letting [law] firms down, but the most basic of day-to-day interactions that are costing them dearly…
“Typically, it is a simple matter of applying emotional intelligence – a human touch, yet the initial contact with legal firms was often the opposite.”
Oh, and because there hasn’t been enough reform to the civil costs regime in the last 20-odd years, the Master of the Rolls, Sir Geoffrey Vos, said he has asked the Civil Justice Council to embark on a review of costs issues at all level.
He said: “It’s extremely important that we take the opportunity now to consider whether the ways in which we handle costs and costs shifting are fit for a modern justice system delivering dispute resolution digitally.”
Neil Rose is the editor of Legal Futures
