Crossroad for motor claims

The introduction of the Ministry of Justice’s new fast-track system for processing low value road traffic accident claims has been a bumpy ride to say the least.

Due to problems with receiving passwords, many insurers and claimant representatives have complained that they have been unable to even log on to the portal through which claims will be processed under the new system.

The majority of those who need to access the new system are now at least able to get on. But another problem came to light this week as it emerged that the registrations of up to 50 organisations – mainly claimant representatives – had not been fully processed due to information not being inputted correctly. Add to that those insurers- accounting for about three per cent of the market – which have not yet registered and it is clear that many claims cannot still be processed through the new system

Leading claimant lawyers Andrew Welch of solicitors Stephensons warned in last week’s issue of Insurance Times that these glitches could result in a spate of fresh litigation further down the line as insurers dispute the cost of claims which have been dealt with under the old, more expensive process.

Are these just teething troubles or does the new system, which is meant to simultaneously speed up and cut the cost of handling claims worth up to £10,000, possess more fundamental flaws?

The good news for the insurers, which pushed for the introduction of the new system, is that those who have managed to log on successfully appear to be relatively happy with the process. And the numbers of claims being inputted into the portal are climbing rapidly, up fourfold in the past fortnight.

Already the first sets of statistics are throwing up some interesting figures. They show that insurers have admitted liability on nine out of ten claims to reach this stage of the process.

The reaction of experts is that this level of admissions is on the high side, fuelling suspicions that insurers are flushing out such claims early on.

But, if this is not the case, it may add ballast to the arguments of those who argued in the run up to the new system’s introduction, that insurers would use it to resolve claims quickly and cheaply, exploiting the potential cost savings built into the system.