The potential increase in the fast-track claims limit presents both opportunities and challenges for the personal injury industry. Andrew Pemberton examines potential unwanted developments and implications for claimants, insurers and claimant solicitors.
Rehabilitation conducted under a joint instruction is widely considered as the preferred approach but, within the fast-track environment, the rehabilitation code and JI are irrelevant. Claimant solicitors are first to access the injured person and systematically provide access to rehabilitation — without consent from the insurer.
In the fixed-fee world, the concept of asking the defendant's permission to engage with and fund rehabilitation is folly. Claimant firms have polished processes that swiftly refer clients into medico-legal experts and then treatment as required. More proactive firms identify the need for treatment and refer directly to rehabilitation ahead of the expert appointment. Under this model, treatment is typically physiotherapy and costs just a few hundred pounds.
How insurers view rehabilitation delivered in this way varies from reluctant acceptance of something they are powerless to stop, to positively encouraging it as a way of mitigating their loss. Whatever their view, there are regularly disputes over costs —often the time and effort spent disputing this costs more than the amounts under discussion.
One recent example was a disputed fee for physiotherapy treatment that saw the insurer debating with the claimant solicitor and, in turn, the rehabilitation provider, over the £5 cost of a final treatment report. Doubtless someone had figured out that £5 multiplied by 10 000 cases was worth arguing about.
Triage assessment reports, conducted by providers in line with the pre-action protocol to consider a claimant's rehabilitation needs, are commonly disputed by defending insurers. If the costs debate continues it is only a matter of time before someone decides to test what is 'reasonable' in court and, therefore, recoverable treatment costs are.
This may appear a minor point but, under the proposed reforms to extend the fast-track limit, discussions about costs will become more commonplace and not solely about physiotherapy. With an upper limit of £25 000, claimant solicitors would be instructing cognitive behavioural therapy, telephone case management and minor surgical procedures without contacting the defending insurer. If the existing claimant model is applied to these higher value cases, we will see more disputes, requiring fast-track claims handlers to broaden their understanding of rehabilitation interventions and their charges.
In theory, this pressure might increase the need for JI. In reality, on a fixed-fee model claimant solicitors will not want the delays and additional costs that JI produces. Claimant solicitors will inevitably use existing suppliers who will deliver the more expensive and complex rehabilitation services along with the credit and bad debt provision this will require.
This means providers will require larger banking facilities to fund services traditionally funded directly by insurers, thus increasing costs for the insurer and increasing the level of rehabilitation delivered outside of their influence.
This development, of course, depends upon securing the agreement of the claimant to take on the risk of funding relatively expensive rehabilitation programmes. Gaining their approval to incur £300 of physiotherapy is one thing but £3000 of CBT? Will claimants be happy to proceed given that — if their case fails — they will be left with all or part of the costs?
The process engineering that has occurred within the fast-track claimant industry is huge. Offshoring, automated reporting, computer-based valuation tools and automation of the process are common. If and when the limit is increased claimant firms will inevitably seek to apply these principles to higher value claims. But can these slick operations accommodate the management of more complex rehabilitation needs, such as selection of appropriate providers, interpreting an expert's recommendations or the results of treatments?
One way for insurers to avoid this consequence is for them to review their own model for rehabilitation provision under these newly created fast-track claims. Typically insurers adopt a 'rehab panel' of preferred providers that they contract with and control. This benefits the insurer but does not build trust or confidence with the claimant community who have concerns about such behind-the- scenes arrangements.
If insurers gave claimant solicitors permission to instruct directly from an approved provider list without their authority or JI being in place, then many issues surrounding costs and access to care could be removed. This would fulfil the claimant need to instruct rapidly without any insurer engagement, prevent the claimant solicitor acting as the 'debt collection agency' of the rehabilitation provider and give the insurer some reassurance about quality and cost of supply.
Another solution would be for insurers to publish, or agree in advance, fee levels they are prepared to fund akin to the Association of Medical Reporting Organisations' agreement but for common rehabilitation services. This would give claimant solicitors and providers advance intelligence about what would be recoverable without dispute.
Better way forward
Such a model could be applied in the revised fast-track world and in the wider multi-track environment where more complex immediate needs assessments are being conducted without joint instruction. The benefits to the insurer would be significant in operational process time, lifecycle and cost containment.
This more transparent method for instructing providers could stimulate the accreditation and quality control discussions that have rumbled on for years. If an insurer stated they would fund the services of any provider with a certain quality accreditation working within a published costs framework then claimant solicitors would immediately seek to instruct those providers so reducing their costs without any adverse impact on their client.
The increased fast-track limit presents issues for everyone. We have an opportunity now to devise new ways of facilitating rehabilitation for claimants that protects the integrity of the industry.
Can the British Association of Rehabilitation Companies, Association of Personal Injury Lawyers, Bodily Injury Claims Management Association, Forum of Insurance Lawyers and the Association of British Insurers come together to tackle this totally foreseeable issue? Or, as with credit hire in cars, will the industry sit back, wait to see what happens and then try to tackle the issue retrospectively?
Andrew Pemberton is director of Argent Rehabilitation
A huge well done to all involved with organising our Remembrance Day event on Friday, including our Corporate Real Estate team. One of them, Ibrahim, took this incredible footage of poppies dropping as he (along with others) leaned (safely!) over the gantry to let them go. pic.twitter.com/pSbapkWBBR— Lloyd's (@LloydsofLondon) November 12, 2018
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