Expert panel suggests that it is imperative to engage with third parties early in order to grasp a fuller understanding of claims costs

Insurers and MGAs must get into good habits before the implementation of the Civil Liability Act next April by dealing with claims proactively and engaging with third parties to arrange interventional rehabilitation prior to the completion of a claimant’s formal medical report – this ensures that firms have a more accurate picture of claim costs earlier in the claim process, said Ken Specter, managing director at Connexus Group.

Speaking at a webinar hosted by the Managing General Agents’ Association (MGAA), titled ‘Management of low value personal injury claims under the Civil Liability Act 2018 Protocol’, Specter explained that the use of interventional rehabilitation can help provide insight into claim costs because healthcare professionals can assess the extent of claimants’ injuries and start providing treatment prior to receiving the results of a formal medical report.

This, in turn, helps the third party to recover from their injuries faster, Specter added, especially as it can be difficult for claimants to schedule and attend medical appointments pertaining to the formal report in a timely fashion.

Stephen Hearn, large loss manager at KLS Law, agreed with Specter.

He said that engaging with the third party early definitely provides a guide on costs and enables insurers and MGAs to reserve more accurately across their books of business, as well as shorten the lifecycle of claims.

To do this requires collaboration between FNOL teams and triage clinicians, he added.

Furthermore, Hearn estimated that 85% of claims following the implementation of the Civil Liability Act will be able to be settled due to early rehabilitation measures.

The final panellist, Gareth Jones, business development manager at Connexus Health and Rehabilitation, emphasised that early rehab doesn’t replace the traditional medical appointment and resulting report, but instead works alongside it.

For him, triage is the key element for successful early intervention.

Unique opportunities

Setting the scene around the impending Civil Liability Act – colloquially known as the whiplash reforms – Specter said that the act’s implementation will mainly affect motor, employers’ liability and public liability claims.

However, he added that “the changes coming about provide unique opportunities” such as “the potential for more fixed fees for multi-track cases”.

He believes opportunities such as this can help insurers and MGAs “to improve their profitability and to control the cost of claims more”.

But, despite the possible opportunities, Specter noted that the industry still hasn’t “reached nirvana in this regard because there are some challenges”.

He explained: “For most insurers, we want certainty, we want clarity and we want to know what’s going to happen because [claims is] a pretty large ship to turn around and move forward in a different direction.

“What has to happen now before these changes are implemented are three things. First of all, the Civil Procedure Rules Committee have to publish the rules relating to the new processes and they’ve not done so to my knowledge yet.

“The second thing is there has to be discussions between the government and the Lord Chancellor about agreeing the level of damages to be given. There is a proposed tariff, but it hasn’t yet been signed off.

“And then thirdly, there has to be some legislation – albeit secondary legislation – that has to be imposed in parliament, or put through parliament before these changes can be taken into effect.

“We’ve effectively got four months to have all these things done and if you want my educated guess as to when these changes are likely to come in, I would respectfully suggest that that would be July rather than April. Even that doesn’t give much time.”

The whiplash reforms, in part, have been designed to produce cost savings within this sector of the market, as well as to mitigate fraud and exaggerated claims.

However, Specter thinks “there is an issue in regard to whether the cost of managing the claims is going to be so significant because you’re dealing with litigants in person, people who don’t know what they’re doing effectively, that that will to some extent outweigh the benefits from the lower damages”.

Industry understanding of the new processes is a further challenge, emphasising the need to look to interventional rehabilitation, Specter noted.

He continued: “One of the problems with the new rules is it’s going to take months until the situation arises where everybody understands what needs to be done.

“The rules haven’t even been published yet. So, insurers and MGAs will be well advised to start on the front foot.”