Unrepresented claimants using the Official Injury Claim (OIC) portal are doing better than those with lawyers, according to our analysis of the system’s first year.
However, there are issues bubbling under the surface which could make the second year a bumpy ride for all those involved.
Our data shows that the OIC has delivered unrepresented claimants’ compensation more quickly. They are receiving comparable levels of settlement to those with lawyers and, because they are not paying a solicitor, are achieving a better overall result. However, fewer than 10% of claimants are using the portal themselves.
The reforms have resulted in changes to claims management that are still bedding in. The sector awaits the outcome of test cases that will provide some much-needed clarity on how claims that involve both tariff and non-tariff injuries should be handled – the data shows that only 11% of claims are ‘pure’ tariff cases.
Hand/wrist injuries and headaches are the most common non-tariff injuries being claimed for, the types of symptoms that would have been included in the whiplash claim as aggravating factors before the OIC but are now subject to a specific diagnosis and prognosis.
This growth in non-tariff injury claims has also eroded the expected cost reductions for compensators.
The whole industry has been surprised by the relatively low volumes, although a reduction in claims was part of the government’s goal for the new regime.
In the early months following launch, some people blamed technical difficulties, the pandemic and tactical behaviour. However, now that accident levels have largely been restored to pre-pandemic levels, injury claims appear to be stabilising at less than 60% compared to pre-Covid.
Ian Davies, partner and head of the motor practice group at Kennedys, says: “The most likely reasons for this are that minor claims are no longer worth pursuing given the reduced awards for whiplash, and the lack of profit for lawyers from damages-based fee agreements. Fraudsters will also have been discouraged."
“We think too that claimant lawyers are advising clients with more serious injuries to wait to make their claim until they know for sure how long their symptoms have lasted – the steps between the tariffs make it worthwhile if your prognosis is, say, 12 months. This means there could be a lot of higher-value claims sitting in solicitors’ cabinets, waiting to go.”
There has been notable consolidation among claimant firms, with the 12 largest in our data accounting for around two-thirds of all OIC claims.
Ian Davies adds that the continuing uncertainty around mixed claims and increasing claims for non-protocol costs such as credit hire make it likely that satellite litigation will begin to emerge, as parties look to the courts for clear guidance.
Mike Gilpin, commercial director at Kennedys IQ, which builds systems that our clients use to handle OIC and other claims, says there were some initial teething troubles with the portal but the end product appears effective.
“Some of the industry suffered a few challenges when integrating it with their own systems but the claims process works and the OIC team is increasingly responsive to issues and enhancements.”
However, he says more of the public need to know the OIC portal is there. “We understand the OIC has the intention to improve awareness, while insurers are more frequently directing their policyholders to the portal where their legal expenses are not covered."
“Ultimately, the portal will only really deliver what it promised if people know about it and have the confidence to make their claims directly. So there needs to be a real focus on improving awareness.”