The Ministry of Justice has confirmed that the promised consultation on whiplash remains on its agenda, despite being delayed as a consequence of last week’s government reshuffle.
The government first agreed to hold a consultation into whiplash in February, when industry stakeholders joined Prime Minister David Cameron for a motor insurance summit at 10 Downing Street.
The consultation was pencilled in for the summer but delayed until last week when it was again bumped down the agenda.
An MoJ spokesman told Post that the reshuffle “has put everything back, although the consultation had been cleared by [former justice secretary] Ken Clarke and [minister] Jonathan Djanogly. Now, with the new ministers in place, they have to go through their portfolios and work through to it but it is still on the agenda.”
Helen Grant, one of two MPs along with Jeremy Wright to join the MoJ in ministerial roles in the reshuffle, is expected to assume responsibility for issues surrounding civil court and civil cost reforms, including whiplash, previously handled by Djanogly, who has returned to the back benches after eight years as a Tory front bencher.
The consultation is expected to ask for views on the formation of an independent medical assessment panel to offer diagnoses on whiplash to potential claimants, as well as views on increasing the upper limit of personal injury claims that can go through the small claims court from £1000 to £5000.
These points were debated last week at Westminster in wide-ranging discussions hosted by the Transport Select Committee, the first stakeholder talks primarily dedicated to whiplash.
Among the attendees were: Aviva claims director Dominic Clayden; Axa Intermediary’s newly appointed claims director Chris Voller; and Nick Starling, director of general insurance and health at the Association of British Insurers.
Simon Drew, chief executive of claims mediation specialist Inter Resolve; Karl Tonks, Association of Personal Injury Lawyers president; Donna Scully, chair of the Motor Accident Solicitors Society; David Brown of the Institute and Faculty of Actuaries; Dr Simon Margolis, chief executive of Premex; and Andrew Ritchie QC also attended alongside a representative from the Department for Transport.
Speaking after the event, TSC chair Louise Ellman told Post: “I thought it was very important to get all the players together in this way. The point was to hear different views and new ideas.
“I was interested in the idea of independent medical assessment for whiplash conducted by professionals not connected with the insurance sector or the claimants.
“It was also important to see how the legislation that is currently in Parliament can actually be implemented in relation to referral fees, whether a ban on referral fees will take place, and how alternative business structures will operate and be regulated.”
Ellman added: “One of my [wider] concerns about whether banning referral fees will resolve the problem is that, with legislative provision for ABSs meaning companies can act as solicitors, I think it is fairly important to see how that operates and whether referral fees will re-emerge in another form. That’s a big question, to which we don’t yet know the answer.”
Ellman explained that the TSC plans to consider the issue of whiplash in an “on-going way” and called for the MoJ consultation to happen as soon as possible.
Attendees also agreed on a pressing need to address the fraudulent element of whiplash claims.
Starling said: “We need to stem the epidemic in whiplash claims which in recent years have risen despite a fall in road crashes.
“For too many people, whiplash has become the fraud of choice, simply because it is difficult to disprove.
“Of course, some whiplash claims are genuine and we need to better separate these from the dishonest.
“This is why we would support establishing some form of independent panel of medical experts to best assess whiplash claims, as well as considering whether low value whiplash claims should be compensatable without objective medical evidence.”
Apil has meanwhile called for a more measured stance on whiplash, revealing research last week which found that claims have dropped by 24 000 in the past year.
Tonks added that the meeting “was useful for people to share some common ground as well as disagreement”.
He told Post: “We recognise that injured people should get some proper redress and that is what Nick Starling also said, but it’s a question of how that happens.
“Insurers suggest increasing the value of claims in the small claims court to £5000. But we think it is an inappropriate process for personal injury claims; it is more suited to unpaid bills than injury.”
He added that Apil supports “more rigorous monitoring of CMCs” but said “if insurance companies are encouraging customers to claim against other insurers to attack their bottom lines, as the Office of Fair Trading found evidence of, they are also part of the problem”.
Frequency in claims
Clayden told Post that the “government is making progress on dealing with personal injury and sees the issue within motor and, in particular, the legal costs, as a real problem”.
He added: “We have a problem in terms of the increase in claims frequency. Within that, claims inflation is running at 6% and, of that, half goes on legal costs.
“Apil and Mass have argued that steps are already being taken to reform the system and that we should wait and see the impact of those first, but I do not think that is good enough from a customer’s point of view.”
Clayden added that “in 30% to 40% of cases” that Aviva deals with through the MoJ portal, it is receiving a notification from a third party that it has submitted a claim.
“We get notification through the portal that we are submitting a claim. We might get a solicitor’s letter so they are clearly acting without authority. The customer doesn’t realise that a lawyer is submitting a claim on their behalf.”
However, he thought that the possibility that it could be the other insurer selling customer data to turn a profit is unlikely.
Wider rehabilitation use
Clayden also called for wider use of rehabilitation in whiplash cases, adding that “access to justice should not always be interpreted as access to lawyers”.
He added: “We offer rehabilitation on day one through our partner HCML and, within a couple of hours, a physiotherapist will call the customer and tell them their likely prognosis.
“They send the customer a DVD of exercises, they have a conversation and offer physio and, within 30% of cases, they say they don’t want it.”
Drew added: “There is still too much incentive to use pound notes to drive behaviour in the wrong direction.
“The fixed fees that are awarded via the MoJ portal will now also have to come down and, in my opinion, this detail should already be available. So as an industry we can be well prepared for the April 2013 referral fee deadline.”
He called for the MoJ to set fees at £600, which is £750 below that set today including uplift, because “if fees go too low, it drives the incentive to litigate claims which drives solicitor fees toward the £3000 mark on average”.
“If the fees are set around £600, there is still enough profit for it to be sensible,” he claimed.