Did the government miss a trick by not signposting online alternative dispute resolution via the Official Injury Claim process?

By Editor Katie Scott

This week, the Motor Insurers’ Bureau (MIB) has published the latest batch of data from the Official Injury Claim (OIC) portal, revealing the claims activity occurring through the system between 1 December 2021 and 31 March 2022.

Katie Scott_bw_path

Katie Scott

According to these figures, claim causation is so far being disputed across 2,138 claims – consisting of 2,048 represented claims and 90 unrepresented claims.

Just under two-thirds (64%) of the OIC portal’s represented claims and 61% of its current unrepresented claims have also been removed from the portal process to date – the report cited one reason for this as being a dispute relating to causation.

Plus, although claims settlements are on the up – with 13,843 claims being settled in this most recent reporting period alone, compared to 17,607 claims settled since the portal’s launch in May 2021 – the average time of this process is also increasing.

The data indicated that claims are now taking 139 days to reach settlement, versus 85 days in the prior reporting period (1 September to 30 November 2021).

Stats like these raise the question of whether the Ministry of Justice (MoJ) and MIB should have taken more seriously the option to introduce an alternative dispute resolution (ADR) provision linked to the OIC portal, which may have been able to reduce claim settlement times and could possibly have positively impacted liability discussions.

This is certainly the view of qualified mediator Stewart McCulloch, managing director of Handl Group-owned online ADR platform business Claimspace.

He told me that he was “very disappointed that the government” decided not to incorporate ADR into the OIC portal process.

Commenting on anecdotal market feedback, he said: “My understanding is that there isn’t the funding available from the MoJ to provide an ADR service on the back of the OIC [portal] directly. And by that, I mean a service that’s actually signposted on the OIC. There’s no funding available to do that.”

McCulloch believes, however, that “the issue [of] who is going to pay for the delivery of the ADR” is a bit of a moot point considering the potential scale of its use.

He explained: “When the government looked at that originally, they had a budget in mind which was around £50m, but that was based on an assumption that there would be 400,000 requests for ADR in any one year - that’s certainly not the case and never will be.

“In my view, the market for ADR on OIC cases is between 20,000 [and] 40,000 in a year, so the cost of provision is significantly lower than the government thinks it is.”

Increasing demand

ADR does seem, however, to be on the government’s agenda.

Last August, the MoJ launched a call for evidence titled Dispute resolution in England and Wales, which closed in October 2021. The consultation received 193 responses, while 78 individuals participated in related roundtable events.

The MoJ subsequently published its response to the call for evidence in March 2022 – although it didn’t really trailblaze any proactive next steps.

Instead, the government department said: “The Ministry of Justice would like to thank all respondents for their contribution to the call for evidence on dispute resolution in England and Wales.

“The information gathered from this consultation exercise will inform the government’s developing work on how to utilise dispute resolution processes to deliver swifter, more cost effective and more consensual access to justice.

“Any future policy proposals will be subject to further public consultation.”

McCulloch thinks the call for evidence is generally a good thing, helping the government “start to understand” that “the demand is out there” for ADR.

He said: “Although the government has always paid lip service to ‘yes we need to consider ADR’, I don’t think at the moment [it] really [understands] that if court cases move away from being resolved at court and start being resolved by way of straightforward ADR or online ADR, which are much simpler, that [then] reduces the demand on the Treasury to fund the court service and that’s a massive win for the government.”

Embracing ADR would “make a significant change to [the government’s] budgeting”, McCulloch added.

Digitisation failure

Furthermore, McCulloch remains unimpressed with “what the government [has] tried to do so far in terms of digitising the court process”.

He explained: “One of the ways in which you can do the wrong thing in this arena is to digitise the old ways of doing things.

“What you should be doing is taking technology and looking at what [it] can do for you - how can we bring about the same result, same outcomes that we had from the court system, but with a much simpler process by exploiting the technology that’s available to us.

“And if you start thinking in that way, then you clear away the old baggage [and have a] bright, blue sky ahead of you to sail off [and] create a much cleaner environment - a complete ecosystem for resolving claims without friction.

“There’s no need for blood on the carpet any longer.”

Feedback from Insurance Times’ Fraud Charter roundtables is consistently depicting poor functionality and continuing technology issues with the OIC portal.

Maybe tapping into something like online ADR could help alleviate some of the pressures the new system has been facing and provide some respite for frustrated market practitioners.

With the MIB and MoJ set to review the OIC portal come its first anniversary this May, it will be interesting to see whether ADR will be on the cards as a new addition or not.