Road traffic accident claimants are having to wait for more than a year before being heard in court, finds the insurer’s analysis

Insurer Zurich has calculated that around £240m worth of claimant damages are currently tied up in the litigation process for more than a year, as the Covid-19 pandemic has exacerbated existing court backlogs and stalled trials’ progress.

Analysing Civil Justice statistics, Zurich also found that UK claimants from road traffic accidents have waited on average 62 weeks to be heard in court following a disputed car accident outcome, or a whiplash claim if it litigates outside of the Ministry of Justice (MoJ) procedure.

Zurich believes these delays will only be extended as the legal sector struggles to play catch up from last year, following the onset of coronavirus.

According to official statistics the firm analysed, between April and June 2020, only a quarter of the normal volume of trials took place.

Furthermore, if there is a dispute over valuation for claims that remain in the MoJ process rather than heading for litigation, claimants will still need to wait around nine months for a stage three determination.

Annually, there are approximately half a million whiplash claims logged in the UK, with an estimated value of around £3,000 per case.

Pushing the portal

In response to its findings, Zurich has issued a call to action for the government to publish the rules and procedures for the new Litigant in Person (LiP) portal as soon as possible – it hopes this will enable the insurance industry to ensure that all systems and processes are prepared and tested ahead of the scheduled April 2021 launch date.

It added that a “workable solution” for the alternative dispute resolution process (ADR) must also be prioritised, since this is not to be included within the LiP portal.

Emphasising the point, Calum McPhail, head of liability claims at Zurich, said: “Pressure on court capacity as a result of the pandemic are creating delays of over a year from the point of litigating to trial date, and this is only likely to be delayed further due to the ongoing impact of Covid-19.

“As such, any further postponement to the civil justice reforms is likely to exacerbate this backlog and create more frustration for everyone.

”This kind of delay cannot be regarded as fair access to justice for an unrepresented claimant.

“The government must ensure that the reforms are introduced alongside a straightforward mechanism to resolve disputes to free up court time and, ultimately, reduce the time taken to resolve disputes and settle claims.

“The insurance industry fully supports the personal injury whiplash reforms, but it is absolutely critical that when the new process is introduced, it must work fast and seamlessly for unrepresented claimants.

”If it doesn’t, there is a danger of driving these people into the hands of claims management companies, who will take a cut of the payout.

Industry backing

The Chartered Insurance Institute (CII) has openly agreed with Zurich’s stance. Keith Richards, chief membership officer at the professional body, said: “Covid-19 has had an exceptionally high level of impact on our society and way of life, so while we should not be surprised that it is affecting the justice system, we should all be rightfully concerned.

“We all know justice delayed is justice denied. Insurance plays a vital role in supporting people through some of the most difficult times, particularly when it comes to ongoing health and wellbeing costs following personal injury, and therefore we echo these calls from Zurich for the much-needed whiplash reforms to be introduced in a timely fashion alongside a straightforward dispute resolution system.

“We fully support these calls from insurers for a swift and seamless introduction of the new process and the government must ensure it also works for unrepresented claimants.”

Although Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations (ACSO), agreed that ADR needs to be addressed, he believes the LiP portal should not be rushed to completion, as this will simply cause more problems.

He explained: “Growing court delays are a huge source of frustration for injured people, but they will be even more put upon if the government rushes through its new claims portal. The likely chaos could add to the courts’ backlog and create an entirely avoidable headache.

“Adding an alternative dispute resolution mechanism is essential if the portal is to be effective, something both insurers and the government previously agreed with.

“Schemes are currently being piloted which could bring case conclusion down to a matter of days and be in all parties’ interests.

”Waiting for the results from these pilots and making rehabilitation part of the portal from the get-go will help ensure we get the whiplash reforms right.”

Technology as a solution?

Speaking to these pilots mentioned by Maxwell Scott, Marcus Taylor, claims director at Minster Law, flagged the work his firm is currently doing in this area.

For him, “the industry - whether defendant or claimant - cannot and shouldn’t wait for the government” as “customer demand for settlement via technology is growing fast and we need to step up to the plate. The alternative is for customers to wait over a year for their case to go to court”.

He continued: “There is widespread concern across the claims industry about the court backlog and the unprecedented length of time claimants in disputed cases are having to wait for determination.

“To solve this, Minster Law is trialling a new alternative dispute resolution service with insurers who are keen to collaborate in the interest of getting customers the settlement they deserve in days rather than months. Most within the pilot have concluded in just 10 days.

“The pandemic has hugely accelerated the use of technology in claims processing and we’ve found that our customers are happy to service their claim digitally, albeit with human intervention where they require it.

Graham Pulford, chief executive of handl Group, agreed that the industry should not wait for the long overdue LiP portal, but should instead look to claims mediation via technology – he added that many solutions in this vein are already available and “are staring the industry in the face”.

“The civil courts backlog is a serious problem that, due to Covid, could become a disaster unless the industry acts now. We don’t think insurers should wait for the government’s small claims portal to be launched; the project is already delayed by over a year and still faces many challenges,” he explained.

“Claims mediation through technology is already in place, as are technology-enabled processes to manage treatments, such as rehabilitation online. Customers should be offered these options now.

“Claimants need fast settlement and fast treatment for their injuries. By waiting for the government portal to arrive, the industry could be waiting for many more months and further risk the health and wellbeing of its customers.

“There are a raft of new, reform-ready products in the market. The solutions are staring the industry in the face, so we urge insurers to grasp these opportunities now rather than be side-tracked by the delays to the government portal.”