Market round up: September 2022

One of the main ongoing issues with the Official Injury Claim (OIC) portal is that the approach to mixed claims – those involving both tariff and non-tariff injuries – has still not been resolved. And there’s no sign of that changing any time soon.

From before the OIC’s launch last year, it was recognised that judicial guidance would be needed to value damages for pain, suffering and loss of amenity in such claims. This is particularly important given that two-thirds of the 280,000 claims submitted to the portal in its first year – to 31 May 2022 – were mixed claims.

But an update last month from a cross-sector working group made up of the Association of British Insurers, Association of Personal Injury Lawyers and Motor Accident Solicitors Society said only that they had agreed the basis on which the trio would work together to ensure that cases reach the court “at the earliest opportunity”.

Both sides have instructed lawyers: Andrew Parker of DAC Beachcroft is, as ever, leading for defendants, with well-known claimant solicitor Mark Harvey of Hugh James on the other side. The update said they were coordinating the selection of claims to use as test cases: “First instance judgments are now starting to be handed down. The respective lawyers are very interested in hearing about these, so that they can consider suitability to form part of the wider basket of test cases that will head towards the Court of Appeal.”

At my PI Futures conference in May, not a single delegate said they had a court decision on an OIC case.

It doesn’t help that the civil courts are moving so slowly. Research by Manchester PI firm Express Solicitors and the Association of Consumer Support Organisations (ACSO) this summer found that fast-track and multi-track civil cases are taking up to 15 months to complete their first case and costs management conference.

The worst performing regions were the East of England and the South-East, with average waiting times of 349 and 318 days − much longer than the 201 days recorded for the best performer, Yorkshire and the Humber. Civil justice is a postcode lottery, as Express’s managing partner, James Maxey, put it.

The most recent government figures, meanwhile, show that the time between issue and trial for fast- and multi-track claims hit 75 weeks in the second quarter of 2022, the longest this century – the figure has been between 52 and 59 weeks for most of that time. This is despite volumes for all civil actions remaining below pre-pandemic levels. At 50.8 weeks, the time from issue to trial in small claims was near the all-time high of 51.6 weeks reached in the first quarter of this year.

The delay in resolving the mixed claims issue will no doubt have contributed too to the lengthening time it is taking OIC cases to settle as well. Nearly 35,000 claims settled in the first year, with the average time from claim to settlement being 175 days, up from 139 in the previous quarter.

“This is to be expected as we see cases settle with more complex injuries and longer prognoses. It is likely to continue to rise,” the OIC said. Where mixed claims were settled – and there were more than 12,000 in all – the value of the non-tariff element averaged slightly more for unrepresented claimants than represented ones – £924 versus £896. Some 36% of claimants are waiting for more than six months to have their claim settled.

As ACSO executive director Matthew Maxwell Scott says, this is “no advertisement for what we were promised would be a state-of-the art-digital journey, built around the needs of the consumer”. He has urged minsters to consider putting settlement targets in place.

Separately, the latest claims data from the Compensation Recovery Unit (CRU) – obtained by ACSO from a freedom of information request – shows that motor claims recorded for April to June 2022, at 93,113, are slightly below the previous three months’ figure (97,099), but more significantly 1,860 lower than the equivalent period in 2020, which was the height of the Covid lockdown.

Mr Maxwell Scott says: “Given there has been a bounce back in UK traffic levels since then, we would expect the number of RTAs largely to mirror these, but it is simply not the case. We’ve now had a whole year’s data for motor claims where every quarter shows the number recorded by the CRU to be below 100,000. As the three-month average before the pandemic was around 160,000, this means some quarter of a million claims we might have expected to be recorded have disappeared.”

The problem is that I suspect the government doesn’t care. As I wrote in the last newsletter, the Ministry of Justice’s justification for the OIC has shifted over the years from discouraging fraud to simply reducing the number of claims. On that unsatisfactory measure alone, it is doing its job.

And, indeed, there are signs of it having an impact on fraud too; according to the ABI, while motor continued to be the most common form of insurance fraud, the number fell 7% to 49,000 frauds detected, while their value, at £577m, fell by 1% – an average of £11,775 per claim. The ABI did not explicitly link the fall with the OIC, and correlation is not causation, but it’s positive news.

Finally, in another long-running issue, unfortunately July’s Belsner hearing in the Court of Appeal had to be postponed due to Covid – it should now happen in the autumn. But adding to the case law, a costs judge has ruled that a litigation friend did not give informed consent to deductions from a protected party’s damages simply by signing a conditional fee agreement.

Costs Judge Brown said the requirement could not be satisfied “by the mere fact of the litigation friend’s consent to the relevant type or amount of costs to be incurred”. He continued: “If it were otherwise then the word ‘informed’ would be redundant.”


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