Analysis: Little leeway from five month delay to whiplash portal

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The Ministry of Justice has addressed a “loophole” meaning children and vulnerable adults will be able to recoup representation costs when the delayed whiplash portal rolls out, but questions linger over its start date, pressure on courts and claimants and the tariff system.

The portal launch, which the government had intended to take place in April, was today pushed back until 1 August.

This followed months of speculation from across the industry that key rules would not be ready in time for its launch, despite the Motor Insurers’ Bureau having completed the portal’s build.

Today a Ministry of Justice spokesperson said: “This government remains firmly committed to tackling the high number of whiplash claims which increase the cost of motor insurance premiums for hard-working families.

“While major progress has been made, we have listened to stakeholders on all sides and decided more time is necessary to make sure we get this important change right.”

The MoJ had been insistent as late as last week that the portal would go ahead as planned, following a government reshuffle.

Last Thursday, even as Post revealed the MoJ was gearing up for the delay within days, a spokesperson said it was “continuing to work towards the implementation date.”

Children and vulnerable claimants

The process had left many fraught with concern that vulnerable adults and children, who are exempt from the system on its initial launch, would be unable to access representation and claw back costs due to the increase in the small track claims limit.

It is an issue that the MoJ has been repeatedly slammed as “missing the point” over.

In a statement today, Robert Buckland, Lord Chancellor and Secretary of State for Justice, confirmed that such claims will remain allocated on the fast track system and not the small claims track.

He added that this would allow them to instruct legal representation and recover costs when attempting to obtain their medical report.

The move has been welcomed by campaigners, who have been calling for this to be addressed for a several months.

Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, said: “It’s welcome that ministers have heeded our warnings that injured children and protected parties would have faced almost insurmountable barriers to justice under the previous proposals. The changes set out will help address this but in future the needs of the most vulnerable people should be addressed first, not as an afterthought.”

Public awareness

But a number of question marks still hang over the project, not least around public awareness. Maxwell Scott labelled its launch during the summer holidays as “a bit like burying bad news”.

“Public awareness of [the changes] so far is zero, despite around 60,000 people a month making a personal injury claim following a traffic collision,” he added.

Managing director of First4Lawyers, Qamar Anwar, called for “reassurance that plans have been laid for a much needed public information campaign”.

Unknowns

Meanwhile lawyers are concerned that five months is not enough time to iron out a number of kinks in the system.

Paul Nicholls, chair of the Motor Accident Solicitors’ Society, said: “The writing has been on the wall for months that the new process was not going to be fit-for-purpose within the proposed timeframe, so the delay is absolutely the right thing to do.

“An extra five months is not very long though to make some key decisions on an informed basis and provide the necessary clarity on issues at the core of the claims process - multiple injuries, partial liability, sanctions, exclusions, payments, medical reports and others.”

Donna Scully, Carpenters director, added: “The postponement of the reforms reflects cross-industry concern about the state of readiness of the litigants in person portal, the significant level of “unknowns” about the process, and the risk of consumer detriment.

“There are still significant elements of the new process that are not known. The new timeframe still leaves little time for insurers and claimant representatives to finish building the part-systems developed to date, and to allow full training and proper preparation for the new regime.”

ADR

Major concerns have been raised around the scrapping of the proposed alternative dispute resolution service that the MoJ had previously pledged. This could leave claimants without a “fair” way to resolve disputes, personal injury lawyers have argued, while defendant lawyers are concerned by what this means for the courts.

On the defendant side, Ian Davies, partner, Kennedys Law said: “It is clear that the decision to move away from the ADR solution will put further pressure on the court system.

“For these reforms to have the desired effect of making the compensation system for low-value road traffic claims fairer and more proportionate, the MoJ must give us every chance to be ready. That means clear decisions, made quickly, with the underlying rules. Then we can go about making these reforms work for the public.”

Tariffs

While insurers have welcomed the delay with a tinge of disappointment, they too have flagged that there are elements of the system they believe need addressing.

In particular, there are fears that rules on the fixed low level tariff will significantly reduce any planned savings.

Martin Milliner, LV General Insurance claims director, said: “With a fixed low level tariff for the main injury - which is what we’ll have with the new portal - this whole process doesn’t work as it means that someone could get say £500 for the whiplash but now a further £1000 for a bruise or two, which just doesn’t make any sense.

“Currently only a third of whiplash claims have other non-tariff injuries but if this issue isn’t resolved then I can guarantee that when the portal is live everyone will be making claims for bruises and the planned savings will significantly reduce. We urgently need to work through these issues and ensure the portal works in the best way possible.”

And Calum McPhail, head of liability claims at Zurich stated: “The omission of “minor injuries” from the overall whiplash definition will mean there will be disproportionate awards for bumps and bruises which will dramatically reduce the level of savings that the government can expect to be realised from the tariff damages system, which by implication suggests that there will be less savings able to be passed on by way of premium reduction which was the initial intention of the legislation.”

Delays

Prior to the government’s announcement there had been speculation that the project would be pushed back to the autumn. With so many questions remaining and a five month time frame to address them, industry sources are worried that further delays will be necessary.

Meanwhile the MIB, which had already opened registration for the Official Injury Claim portal, says it is ready and waiting for the government’s next move.

A spokesperson for the MIB said: “MIB will continue to stand alongside the Ministry of Justice to support their August delivery date. The additional time will allow the CPRC to complete its work and provided we have their decisions by early May, and the changes are not too far away from what we’ve built to date, we are comfortable we will be ready for the new launch date.”

“The Ministry of Justice has listened to stakeholder concerns about having sufficient time to prepare. This is important and our March seminars next week will provide an opportunity for MIB and the Ministry of Justice to discuss the new delivery timetable in more detail.”

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