The data published by the Motor Insurers’ Bureau (MIB) regarding the first three months of operation on the Official Injury Claim (OIC) portal poses some interesting questions. Carpenters Group director Donna Scully takes a closer look at the potential problems so far
Where are the LIPs?
Litigants in person (LIP) represented 9.5% of claimants using the OIC portal over the first three months. We know that claimant representatives have had difficulties with the portal’s application programming interface (API), particularly during this period, so the percentage of LIPs will reduce as the data matures, to reflect increased use by lawyers.
We also know that some LIPs are, in fact, being advised by organisations - including insurers - but this data is not available. All the signs at this point are that genuine LIP usage will be significantly below the Ministry of Justice’s (MoJ) projection of 30%.
It is hard to see any reason why LIP uptake will improve and use by genuine LIPs is likely to ultimately settle in the low single figure percentages.
Lawyers reduce exaggerated claims?
The data showed that 61% of claims submitted to the OIC portal include a non-tariff physical injury. If we include ‘physical only’ injuries and strip out the Small Claim Notification Forms (SCNFs) that have not been properly completed, this figure increases to 65%.
This clearly demonstrates that the prevalence of these injuries is industrywide and cannot result from the behaviour of certain claimant representatives.
Instead, the incidence of non-tariff injuries is simply a function of the new system, which has been designed to identify specific injury types.
In fact, the data appears to confirm the long-held suspicion that claimant lawyers act as gatekeepers, shielding insurers from inflated and exaggerated claims.
The rate of ‘exceptionally severe’ injuries among LIPs stands at 40%, compared to 24% for represented claimants.
Why so many LIP settlements?
The eye-catching aspect of the published data is that while LIPs account for less than 10% of claims, they account for 96% of settlements.
This could be because insurers are generous to LIPs to ensure they are treated fairly, or potentially because their claims are more straightforward. More likely, however, this is because LIPs use the web-based portal, which we know works much better than the API used by representatives.
Of more concern, this raises the question as to whether LIP claims are being settled prematurely, introducing a risk of under-settlement. We will get greater visibility on this issue when the next set of data is published, including damages payments.
There are more liability admissions on LIP cases (95% versus 84% of represented cases), which could also result from a number of factors – including LIPs being individuals captured by the third party insurer and then assisted in bringing their claim on to the portal.
How will poor behaviour be addressed?
It is too early to form a firm view on this, but the data indicates behaviour that is worthy of further investigation.
In addition, we know that pre-medical offers are still being made on non-whiplash claims, despite being banned on whiplash cases because of concerns around fraud. These are issues that the MoJ and FCA need to investigate and police.