Official Injury Claim and fraud – searching for the truth
In a previous blog, we provided our initial thoughts on one of the primary objectives of the whiplash reforms - to remove financial incentive as a way to prevent fraudulent low value claims.
We now turn to the emphasis placed on telling the truth when presenting and responding to a claim in the Official Injury Claim (OIC), together with some comments on the latest data released by the Ministry of Justice.
The ‘Pre-Action Protocol Personal Injury Claims Below the Small Claims Limit in Road Traffic Accidents’ is a 102 page document and the word ‘truth’ is mentioned 40 times.
There are detailed explanations and the majority of documents require verification with a statement of truth, including the Small Claim Notification Form (SCNF), offers, counter offers, List of Losses, the non-protocol vehicle costs claim document and the defendant’s version of events. All of this is before the court pack is even prepared.
The new process designed by the MOJ has a very clear focus on honesty. This is understandable given the package of reforms is intended to reduce opportunist fraud and after all, the signing a statement of truth without an honest belief in its truth, can lead to a finding of contempt of court.
However, whilst there is a great emphasis on truth, the process designed to capture the truth is not much different to the MOJ RTA portal.
Presenting a claim
Under the existing MOJ RTA portal, a Claim Notification Form (CNF) contains a statement of truth. The rules state that:
|The statement of truth in the CNF must be signed either by the claimant or by the claimant’s legal representative where the claimant has authorised the legal representative to do so and the legal representative can produce written evidence of that authorisation… On the electronically completed CNF the person may enter their name in the signature box to satisfy this requirement.|
This is not too far removed from a SCNF in the OIC:
Section G Statement of Truth
I believe that the facts states in this SCNF are true. I understand that proceedings for contempt of court may be brought against me if I make, or cause to be made, a false statement in a document verified by a Statement of Truth without an honest belief in its truth.
If a claimant’s legal representative is to sign the Statement of Truth, that legal representative must confirm that “the claimant believes that the facts stated in this Small Claim Notification Form are true” and they are “duly authorised by the claimant to sign on their behalf”.
The Insurance Fraud Taskforce recommended putting the Statement of Truth at the start of the new OIC process. The theory, established in the work of behavioural science, is that if you are asked to tell the truth at the start you are more likely to, rather than being asked to confirm at the end if you have told the truth. This is similar to a trial where a witness is sworn in at the start and declares they will tell the truth.
This recommendation was not taken up by the Civil Justice Working Group. It is not clear why. Instead, the OIC workflow has the Statement of Truth at the end of the process - a user inputs the data, checks all details are correct and then there is a requirement to “verify the facts of your client’s claim”.
It is too early to offer an informed opinion on whether the increased focus on ‘truth’ wll achieve the intended outcome. It is, however, easy to see how there is not much to deter a fraudster from presenting a claim and taking a chance, similar to the fraudulent claims starting life in the MOJ portal.
Responding to a claim
The focus on truth extends to compensators opposing claims on the basis of fraud or fundamental dishonesty. If a compensator opts to exit a claim from the portal (which can be done at any point) then they select the option of “there is a formal allegation of fraud or fundamental dishonesty against the claimant”.
This warning then appears:
|These are very serious allegations, you need to have evidence to back them up and be aware of the consequences. You must set out the allegations and reason(s) for making them so the claimant is fully aware of the case against them.|
This is a marked difference from the MOJ portal where a compensator can exit a claim without necessarily having to make any formal allegation or produce any evidence; and a marked difference in the emphasis of the wording aimed at compensators.
Certainly this shifts some of the pressure onto compensators and seems to be designed to encourage compensators to play their hand early.
It is easy to assume that a compensator could opt to ‘pay out’ instead, given the reduction in cost per claim. However, the data is starting to tell a different story.
The MOJ periodically releases the data captured by the OIC.
For the period 1 September 2021 to 30 November 2021, there were 62,126 represented claims and 6,233 unrepresented claims. Of those, 4,421 claims exited the portal for a reason other than settlement.
- 11% (52) of the unrepresented claims were exited from the portal due to fraud or dishonesty. The number rises to 17% (670) for represented claims.
During the period 1 December 2021 to 31 March 2022, there were 86,805 represented claims and 8,461 unrepresented claims. Of those, 11,957 claims exited the portal for a reason other than settlement.
- 10% (100) of the unrepresented claims were exited from the Portal due to fraud or dishonesty. The number rises to 13% (1,423) for represented claims.
The fundamentally honest view
There is a much greater emphasis on truth in the OIC, but the opportunity for fraudsters to take advantage of the process remains the same. The early data is showing that fraud and dishonesty is continuing to attempt to take advantage of that opportunity. With OIC claims numbers rising month by month, it is expected that the number of fraudulent claims will rise as well.
Those claimants with representation are seeing their claims removed from the portal more often than those without representation. It may be that all of the existing behaviours, driven by those enabling the claims, are prevailing. This is an area we will be closely monitoring as the data and the process develops.
For those compensators seeking to avoid paying fraudulent claims and/or being targeted by fraudsters, the importance of a refined investigation process, with a degree of automation, to identify fraud, cannot be overestimated.
In our next OIC blog, we will take a look at areas of fraud risk in the OIC.
- Webinar - OIC claims and fraud
- Official Injury Claim and Fraud - removing the financial incentive
- Reforms registering on the Richter Scale demand fraud strategy re-think
- Official Injury Claim: emerging data and trends
- The FCA's reminder to CMCs about the key drivers of harm
- Claim Notification Forms - take them seriously!