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Market (Injury) Update & Impact of the Whiplash Reforms – January 2024
Introduction
Please find below the analysis on the latest MI released from both Claims Portal and the OIC Portal.
In the previous update we noted that the Parliamentary Select Committee’s review in to the reforms was published with questions raised of the MOJ and MIB into the low levels of direct claimants, high level of outstanding claims, concerns over savings being passed on to motorists with insurance premiums. The issue surrounding the valuation of ‘mixed injury’ was raised but not expanded on and is due to be heard by the Supreme Court with a date now set of 20th February. The Government responded to the report in a letter issued on 20th November.
The letter states that…. “the Government remains committed to reducing costs for ordinary motorists in England and Wales through the Whiplash Reform Programme, whilst also ensuring access to justice for all parties through a more proportionate compensation regime.”
In a detailed memorandum to the letter, the Government has responded to the questions raised in the report with its conclusions highlighted below:
Use of the OIC portal by litigants in person
The Government states that it does not agree that further action is required regarding the proportion of unrepresented claimants using the OIC service. The OIC provides claimants with a choice as to whether to progress a claim themselves or to seek the support of a legal professional. It is important that this choice is maintained. They will, however, continue to work with MIB, and other stakeholders to identify and implement web optimisation and improve the visibility of the OIC service.
Unresolved cases and timeliness
The MoJ agrees that more work needs to be undertaken to better understand the flow of claims through the OIC process. Additional data will be published from January 2024 to help to provide greater clarity on the impact of dormant claims on outstanding claim volumes. The MoJ will also continue to work with MIB, CPL, MedCo and the senior judiciary to analyse the different claim journeys, to identify and implement improvements to the claims process.
In addition, feedback and evidence from the recent medical reporting consultation exercise will be considered and fed into the work on claims flow.
The cost of motor insurance
The MoJ agrees that transparency is important regarding the production of the statutory savings report and will work with HMT and the FCA in this regard, taking due notice of commercial sensitivity of the data collected. The Government will continue to liaise with HMT and the FCA in relation to whether to conduct a follow-up assessment one year after the publication of the review report. Whilst there is no statutory requirement to complete a follow-up exercise they do not disagree with the suggestion. They would though caution that it is too early to make such a commitment. They will, however, continue to discuss this point with HMT and FCA as their work on the savings report progresses.
Claims Portal(s) Review
Following the reported influx of EL Disease claims in August and September, volumes have now returned to pre August levels with December recording the lowest volumes seen in 2023. As such and as suggested the increase was down to the sweeping up of claims and potential farming of claims to ensure they were submitted prior to the extension of the Fixed Costs Regime in October last year. Below is the review of the volume of claims seen in the OIC Portal.
Report Highlights
As always, RTA claims presented in Claims Portal (claims above £5,000 or for other exempt claims) still have to be taken into account in the overall numbers and these are shown combined with the OICP data in the chart that follows.
In the last rolling 12 months, November remains the only time the combined new claims received in the month exceeded 35,000, with a gradual drop off in the overall number of claims in June, July and August and September seeing the lowest number of claims submitted into the OICP since April (April had four fewer working days than September).
To compare historic volumes I have added a chart that looks at the volume of claims received since the Portal was first introduced in 2010. Pre pandemic lockdown we were seeing claims regularly in excess of 50,000-60,000 a month, CNFs dropped to below 30,000 in the quarter from March 2020 due to the 1st lockdown, but did increase to in excess of 30,000 by Q3 of 2020. Volumes have remained relatively constant thereafter perhaps therefore the combination of the lockdowns followed by the whiplash reforms together has been responsible for numbers remaining where they are. It would be extremely difficult to separate the two market influences to see the impact of these reforms in isolation, total volumes however, have dropped to 25,000 for the first time since the early pandemic days in 2020. There are of course other social and economic issues that can influence accident numbers not least the cost of living, inflation as well as the residual COVID-19 impact.
The overall of claims split remains circa 75/25 in favour of the OICP.
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