With a five-year gap since the initial reform consultation and the OIC portal still posing functionality problems, has the MoJ taken the easy way out with its no change agenda for part two of the whiplash reforms?
By Editor Katie Scott
This week, the Ministry of Justice (MoJ) finally unveiled its response to the consultation pertaining to part two of the whiplash reform, which primarily sought to tackle processes around credit hire and rehabilitation following a road traffic accident, among addressing other concerns.
The original consultation that formed the basis of the whiplash reform - Reforming the Soft Tissue Injury (‘whiplash’) Claims Process – A consultation on arrangements concerning personal injury (PI) claims in England and Wales – ran for six weeks between November 2016 and January 2017.
Following this, the Civil Liability Act gained Royal Assent in 2018 and work on the Official Injury Claim (OIC) portal started in earnest. This finally came into fruition in May 2021 after numerous pandemic-linked delays.
Now, after five years, the MoJ has issued its thoughts on the second tranche of reform work – but has it taken the lazy way out after what has been a very stop-start implementation process for the OIC portal?
A token response?
The MoJ’s consultation response seems to lack taking any proactive steps to improve credit hire or rehabilitation processes. Instead, the government department’s mantra seems to centre around monitoring the status quo and letting the insurance industry continue to self-regulate in these select areas.
This stance does pose the question of why this part of the consultation was undertaken at all if everything was already deemed to be hunky-dory.
Nigel Teasdale, partner at law firm DWF and a former president of the Forum of Insurance Lawyers, hinted that the five-year gap since the original consultation may have spurred the MoJ into action now the OIC portal is coming up to its first birthday.
He said: “Given the passage of time since the original call for evidence and the general conclusion that the MoJ will continue monitoring but not take any direct action, one could be tempted to think that [its] only purpose in putting [the consultation response] out was to silence those questioning whether it would ever see the light of day.
“A number of the proposals are now irrelevant given [the] various initiatives [and] reforms put in place since 2017 and thinking the MoJ might tackle the thorny issue of credit hire when the Competition and Markets Authority parked it in the ‘too difficult/not worth it’ camp was highly optimistic.”
However, he did note that “whilst the government isn’t committing to anything at the moment, neither is it ruling out taking action in the future if the market doesn’t itself continue to try and curb some of the poorer behaviours”.
Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, also shared his frustration with the time delay: “Quite why this response took five years to emerge is anyone’s guess, though the serious challenges officials are currently experiencing with the operation of the new claims portal may go some way to explaining the delay.”
Teasdale’s view that the MoJ’s response is simply to silence those commentators wondering about its whereabouts certainly ring true for me.
It feels like the MoJ is passing the buck back to the industry after what has been a troubled start to the OIC portal – with many complaining about its functionality. Rather that engage in more potentially pesky project work, the MoJ has decided to simply wait and see what happens.
Despite the scepticism surrounding the MoJ’s response, some industry voices are pleased with the outcome.
For example, Neil McKinley, president of the Association of Personal Injury Lawyers, believes “it is only sensible that these measures have been dropped”.
He continued: “Several proposals in this section of the consultation were in reaction to behaviours which are perceived to be indicative of fraud. They were disproportionate and unfair to claimants, the vast majority of whom are genuinely injured people.
“The suggestion that recoverability of disbursements should be restricted was particularly heavy-handed and would only serve to put undue financial drains on people who are representing themselves in the new system.”
From a credit hire perspective, Kirsty McKno, managing director of Handl Group-owned Cogent Hire, also welcomed the MoJ’s decision “not to take any further action on credit hire during a time of significant challenge for the whole of the motor claims industry”.
Amid the backdrop of motor claims “battling a perfect storm” thanks to “significant repairer capacity issues, vehicle supply shortages, fuel and energy price hikes, insufficient semiconductor chips for vehicle production and [the] shortage of skilled resource”, McKno thinks sector-wide self-regulation is the right result.
She said: “I am convinced that cross-industry engagement is the way forward, especially in coming up with solutions to the unprecedented market conditions which threaten the sustainability of our industry.
“Self-regulation through cooperation creates far better outcomes for stakeholders - including customers.
“Now, we need to work together across the motor claims sector, from insurers to the whole of the supply chain, to make sure that government confidence in our ability to manage our own affairs is not undermined.”
The motor insurance sector can at least breathe a sigh of relief that the recent onslaught of regulatory changes has been paused – for now.