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The government marks its own homework

In July this year the Transport Select Committee published their report “Driving premiums down: fraud and the cost of motor insurance”. In that report, the TSC welcomed the programme of reforms being carried out by the government (which it had largely suggested) and called for more to be done, particularly in respect of psychological claims, but the TSC also cautioned the government from moving too quickly in some of its reforms. It was before this Committee and as part of this process that DWF partner and Head of Motor, Nigel Teasdale, gave evidence last year. On Friday, the TSC published responses to their report from the government and the ABI.

Since the TSC began to address the issue of rising whiplash claims, the government have listened closely to what the TSC have said and have then built on their ideas for reform with some work of their own; MedCo will deliver independent medical experts early next year and last week saw the fundamental dishonesty clause of the Criminal Justice and Courts Bill move a step closer to becoming law. Consequently the government’s response to the TSC’s report is not controversial, but it is illuminating in some ways.

Back in July the TSC identified the practice of some lawyers obtaining unnecessary psychological reports, usually because of the advantage to the lawyers themselves from doing so. The government have responded to the TSC’s comments by stating that while it accepts that this type of claim is on the increase, it believes that the overall numbers of these claims remain low. In arriving at this conclusion, the government have examined two sets of CRU data stemming back to 2009/10:

Table 1 - Number of Claims Registered with CRU labelled as either 'Post Traumatic Stress Syndrome' (PTSD) or 'Psychological' and 'whiplash'[1]

Year

Claims for Post Traumatic Stress Disorder (PTSD) and psychological trauma, with no whiplash element

Claims for PTSD with 'whiplash' included in the injury description

Total

2009/10

2,745

1,457

4,202

2010/11

2,715

1,383

4,098

2011/12

3,091

1,560

4,651

2012/13

3,341

1,473

4,814

2013/14

3,463

1,685

5,148

1   Department of Work and Pensions Claims Recovery Unit snapshot data taken between May 2013 and July 2014.

It was always going to be the case that, no matter how sensible the recommendation might have been, the lack of Parliamentary time before the General Election meant that the government would always struggle to act on the concerns expressed in any serious way. In any event, the government’s response suggests that more needs to be done to explain to it the nature of the problem. The types of psychological claim as identified by the TSC are in fact unlikely to be registered with CRU in either of the categories referred to in the table above, due to the way in which these claims are generally notified to insurers by claimant lawyers.

The majority of these types of claim of course proceed through the RTA Portal. In Section B of the CNF, dealing with ‘Injury and Medical Details’ the question is posed ‘What type of injury has been suffered?’. Four options are available for selection by claimant lawyers completing the CNF and they are: ‘soft tissue, bone injury, whiplash, other’. A box is then also provided so that claimant lawyers should offer a further brief description of the injury sustained, but there is no specified format required to be used and the additional information given is variable in quality. If the ‘whiplash’ option has been selected it cannot be assumed that there will additionally be a reference to psychological issues where it is intended to bring such a claim. Insurers tend to use the information supplied to them in this section of the CNF to notify the claim to CRU and it is unlikely that the kinds of claim referred to by the TSC in their report will be identified from the CNF. Consequently the CRU data will not provide any meaningful insight to the government about this problem.

This highlights the need for Insurers to keep their own data and evidence to enable them to support future arguments in this area

The government has taken the opportunity in its response to reassure the TSC that the work being done to establish medical panels is being carried out in such a way that they will break any direct links between those commissioning the report and the experts themselves. There will be accreditation (and re-accreditation) of experts the government says, together with peer reviewing of reports and auditing. Those who do not meet the appropriate standards will face sanctions.

We of course wait to see how MedCo will work when it appears early next year, but if it cannot guarantee independence of the expert, then insurers may not have any faith in the new system, which could in turn influence whether pre-medical offers continue. In its response, the government confirms the use of pre-medical offers is unlikely to be addressed by a new rule alone.

Finally, the government reiterates in its response that it believes that there is evidence to support the raising of the Small Claims Track limit and it appears it might have returned to the subject were it not for the fact that it was focused on establishing medical panels and due to possible arguments over access to justice,. Perhaps this serves to indicate at least one area that a future Conservative Government might tackle if elected next May.

For more information, please contact Nigel Teasdale, Partner on +44 (0)1772 554264.

Read more about medical panels in Can MedCo do the business?

Read about progress of clause 49 of the Criminal Justice and Courts Bill in Clause 49 retains its bite 

By Nigel Teasdale

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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