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Whiplash reform: As settlement times rise, the OIC portal remains far from perfect - Matthew Huggett, president of CILEX

04/07/23. In 2021, the Ministry of Justice brought in reforms that increased the small-claims limit for road traffic accidents from £1,000 to £5,000, implemented fixed damages for injuries that last up to two years and asked the insurance industry to set up an online claiming system - the Official Injury Claim Service (OIC).

These changes were made amid considerable concern from across the legal profession about the potential for restricting access to justice for those making injury claims.

CILEX, which has over 4,500 members working in personal injury law, was opposed to the reforms and remains of the view that those claiming should be provided with legal advice and that the fixed tariff of damages is not necessary and overlooks the complexity of each individual case.

A recent survey of our members showed that most disagreed that the OIC had improved access to justice. The majority believed it was “not user-friendly” and felt that its complexity was deterring some people from pursuing claims.

Responding to the Justice Committee’s recent call for evidence on the impact of the reforms, we expressed concern about rising settlement times for those seeking compensation for whiplash injuries using the OIC. Concluding personal injury claims as quickly as possible is important for everyone involved but the most recent OIC quarterly data shows average settlement times steadily increasing, from 45 days in the early days of the OIC to 227 days by the end of 2022.

Whilst we appreciate that the OIC predicted the rise to this point and beyond, we are concerned that this is being seen as the norm, with average settlement times pushing closer to taking three-quarters of a year to resolve. This rise has the potential to add yet further pressure to an already strained legal system.

While the increased use of technology is to be commended, there is a real question over the ability of claimants to engage with the OIC. Our member feedback suggests claimants are not able to effectively collate the evidence required for a claim and that claims are often far too complex and intricate for the average injured person. This is why, despite the OIC being built so that injured people could run their own claims, more than 90% choose to use a lawyer to assist them.

The economics of a system, with no costs recovery – meaning clients have to pay lawyers out of their damages – means that small and medium-sized law firms are dropping out of the whiplash claims market, as the work becomes less financially viable. As the number of providers shrinks, there is a real risk of reduced consumer choice and monopolisation of the market by larger, more equipped firms.

In addition, while some CILEX members felt the OIC provided a platform for parties to focus on negotiation as well as early settlement, it was also noted that it could result in non-standard remedies being overlooked and underemployed.

To mitigate against some of these issues, there needs to be ongoing monitoring to ensure the portal is, and remains, fit for purpose. The effect on access to justice should remain under review, with the potential creation of market monopolies for those offering advice and the question of whether the complexity of the portal is preventing certain members of the public from engaging with the system, being key considerations.

There should also be work put in to create further guidance and signposting to reduce user confusion.

Almost two years on from the implementation of whiplash reforms, a significant amount of work has gone into making improvements to the portal, but the system remains far from perfect.

Access to justice for those injured in road traffic accidents must remain paramount. That means better legal education for the public, improved advice and guidance for those using the portal and ongoing monitoring to ensure that consumer choice is not being compromised.

Matthew Huggett is president of CILEX (Chartered Institute of Legal Executives)

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