We started 2021 eagerly anticipating the publication of the PAP and practice directions for the whiplash portal and implementation of the reforms. But the launch of the new portal at the end of May really was just a staging post on the journey. We always knew the issue of additional injuries would be the biggest threat to reducing both claims frequency and severity, and it is still too early to say whether the Court of Appeal might start to consider the test cases during 2022.
We now have the data from the OIC, covering the period up to the end of November 2021.
Headline figures are that in the period 1 September to 30 November 2021, 68,359 claims were presented with 42,131 liability decisions made. The number of claims presented is up 49.5% on the previous quarter, and this quarter the statistics are broken down so we can see the rise each month. September saw 21,569 submissions, October 22,140 and November 24,650.
We have combined the MOJ and OIC data here to try and show overall claims frequency. This shows around 35,000 claims presented in November, and we shall have to see if that continues to rise or has stabilised now that we are six months into the new portal.
The key question however remains: what is the right "pre-OIC" benchmark to measure frequency against...? The November figure represents only around a 10% drop against the six-month pre-OIC average, but that was during the summer months when one would expect fewer accidents due to better weather and longer daylight hours, and it was a period marked by Covid restrictions which were ultimately lifted in July 2021. The period from September to November 2021 is over 20% down when compared to the same period in 2020:
Turning to the split between represented and unrepresented claimants, still around 90% of claimants are represented in the OIC, and a lot of those labelled as unrepresented will actually be successful interventions on the part of insurers. So the number of true unrepresented claimants choosing to use the portal rather than go via a solicitor is likely to be much lower:
Turning to the type of firm that is representing claimants, the CMC figure remains very low indeed at present:
Our own analysis of route-to-market in the OIC compared to the MOJ portal is hopefully a bit more illuminating. What it shows is that the MOJ is the portal of choice for AMC and farmed claims, with ABS/LEI claims much more likely to be submitted via the new OIC. This highlights the need for a real technical focus on the MOJ portal claims which have an even greater propensity for fraud, layering and claims farming. It appears that a significant number of claims are being presented in the MOJ which should have been submitted in the OIC portal, and we are supporting insurers with the resultant costs and conduct issues.
Liability decisions and exits
The number of liability decisions made has risen, as more claims now fall outside the 30 day decision period. The proportion of liability-admitted claims is higher for unrepresented claimants, which you would expect to see, as many of them have been routed through insurer intervention. In represented cases the percentage of disputes is 81%, v 94% in unrepresented:
Causation was disputed in only 4% of the claims, but this figure may rise over time, especially in the context of the plausibility of the type of injuries being presented in the OIC.
The reasons for exiting the process are as follows:
The OIC has provided a breakdown of the reasons why claims have exited the OIC for reasons excluding settlement. Moving forward, they will tell us at which stage the claim left the OIC, which will be useful for our analysis.
The broad categories for claims leaving the OIC process are as follows: removed by compensator, withdrawn by claimant, rejected liability, and court proceedings issued.
As we can see from the illustration above, only three claims exited because court proceedings had been issued, and perhaps surprisingly, all of those claims were from unrepresented claimants. We are told by insurers that they are still seeing very low litigation volumes, certainly much lower than we would have expected by this stage in the claims lifecycle.
The first thing to note is that a number of claims which settled outside the OIC process have been included in these figures. 5% of unrepresented and 9% of unrepresented claims respectively have settled, which increases the overall claims settled figure this quarter by 239, from 3,468 to 3,707.
The owner of a claimant law firm recently explained the technical issues some firms were having when uploading medical reports to the portal. We understand that a number of claimant firms have attempted to get around this by e-mailing the medical report to insurers outside the OIC for settlement offers. Given this development and the fact that the reason for a claim exiting is self-reported, we may find that the overall number of settled claims is being under-reported.
As well as providing the broad categories for exit, we are also provided with subcategories which give more detail of the reason for exit. This combines the claims which have been withdrawn by claimants and those removed by compensators.
Looking at this detailed breakdown, we can see that of the removed/withdrawn claims for represented claimants the majority leave the process because of complexity (49%). The second most common reason is an allegation of fraud (17%). Duplicate claims account for 7%, and 3% of claims leave because the claimant no longer wishes to continue. It might be assumed that all the claims which leave for complexity have been removed by insurers as the protocol makes it clear that claimants can only withdraw claims if they do not meet the criteria for the OIC and/or they wish to withdraw the claim entirely. Despite this, we have seen several claims where the claimant's solicitor has withdrawn the claim for complexity. This is typically when liability has been repudiated in full, and they do not want to follow the OIC process to resolve the claim. At the moment, because withdrawn and removed claims are merged for the purpose of the breakdown, we don’t have a clear line of sight on this.
Additional injuries and exceptional circumstances
The data continues to show a significant number of non-tariff injuries being presented. Alarmingly only 33% of claimants in the portal are claiming tariff only injuries according to the OIC data. This definition includes minor psychological injury. The figure of 33% has been consistent in both the first and second quarter. The OIC has provided more information in respect of the breakdown of the non-tariff (excluding mixed tariff) injuries this quarter, and we can see that 4% of claims have no tariff element at all. We will be tracking the volumes of these claims moving forward, especially as we move closer to a decision in respect of the additional injury test cases.
As many as 23% of represented claimants are claiming an uplift for exceptional circumstances, and that figure nearly doubles to 41 % for unrepresented claimants. This of course raises questions of how to define exceptional? Clearly, 23% of all claims cannot be exceptional, and certainly not 40% plus. The good news for compensators is that it appears the medical experts are in agreement, as many of these claims for uplift are not endorsed by the medical report itself.