With bodily injury claims in the UK rising by over 12% a year, a new code of practice could be the answer. Andrew Parker, a partner at national law firm Wansbroughs and a member of the IUA rehabilitation working party, reports.
At the end of October, rehabilitation, which is described by many as the Cinderella of personal injury claims handling, received a major boost with the publication of a new Code of Best Practice.
Although the code does not yet have the status of a protocol, when asked four days later in the House of Lords for his reaction to it, the Lord Chancellor described it as "a first-class initiative". Drawing attention to one aspect of the code, which its authors believe to be a key breakthrough area, Lord Irvine said: "It is highly progressive to put a duty on both [sides] to make an early assessment of how the quality of the victim's life can be improved by early intervention."
The Code of Best Practice on Rehabilitation, Early Intervention and Medical Treatment in Personal Injury Claims forms part of the Second Bodily Injury Awards study. Commissioned jointly by the International Underwriters Association (IUA) and the ABI to investigate trends in bodily injuries in the UK, it involved analysis of some 700,000 motor bodily injury claims between 1988 and 1998 (60% of the total). It concluded that bodily injury claims in the UK have been rising at over 12% a year, with no indication of the trend diminishing.
Bodily injury claims rising
Bodily injury claims now account for 36% of all motor insurance premiums, compared with 23% in 1993. The study was based on research undertaken by working parties in four key areas: actuarial, legal, statistical and rehabilitation.
An earlier report, published by one of the IUA's predecessors, the London Insurance and Reinsurance Market Association (LIRMA), in 1997, had concluded that the insurance industry needed to become more involved in providing and managing rehabilitation facilities.
This could not be done in isolation. Examples from other countries show that rehabilitation works best as a partnership between the claimant, his family, lawyers, employers, insurers, the medical team and the rehabilitation organisation.
In the UK, however, a fundamental obstacle has been the reluctance of claimants' lawyers as well as insurers to consider rehabilitation in the absence of some industry-wide framework – a symptom of the distrust between them. The rehabilitation working party therefore concentrated on creating a set of guidelines or "best practice" for practitioners.
To ensure support for the code, it enlisted help from the Association of Personal Injury Lawyers (APIL) and the Forum of Insurance Lawyers (FOIL), and then consulted widely within the insurance and reinsurance markets.
As highlighted by the Lord Chancellor, fundamental to the code is an acceptance by all parties that they have a duty to consider rehabilitation. The code imposes a duty on insurers to look at the possible need for rehabilitation treatment as soon as they can and to notify claimants' solicitors in cases that might be suitable.
But it also places a duty on claimants' solicitors to consider rehabilitation and to discuss this with their clients and, where appropriate, their families and medical advisers.
The aim is to create a partnership in which both sides and their advisers have rehabilitation at the front of their minds.
The code is voluntary; there are no sanctions for non-compliance. There is, however, an unwritten sanction that, in not applying the code and in not trying to make rehabilitation work, the outcome may be less beneficial both for claimant and insurer.
One controversial aspect, on which both sides have had to compromise, concerns the rehabilitation report itself. Historically, it has been difficult to persuade claimants' lawyers to let both sides see the report immediately for fear that it may contain information detrimental to a claimant's interests. The code proposes that the report is disclosed simultaneously to both sides.
In return for this concession, the report will be regarded as wholly outside the litigation process and its contents treated as privileged. This is a compromise that lies outside the technical legal position but is intended as a workable way around the problem.
It is proposed that insurers will fund reasonable recommendations as an interim payment and will not then dispute need or cost, assuming the claimant has had the treatment. Although this may not adhere strictly to the current law on interim payments, it is a compromise aimed at encouraging both sides to view rehabilitation positively without suspicion.
The working party met again at the end of November this year to discuss the way forward and, in particular, to decide on its own role in the future. There is still a great deal of work to be done in terms of publicising the Code of Best Practice and promoting its use by practitioners. The code itself will be reviewed next year to ensure that it meets the needs of solicitors, insurers and claimants.
Against the background of the ABI's work with government and industry, the IUA working party will continue to focus on "nuts and bolts" to help promote the use of rehabilitation services.
The Code of Best Practice and the practitioner's guide (which has been drawn up to help the relevant parties have a better understanding of the rehabilitation process and the services available) were realistic objectives within the timescale available under the Second Bodily Injury Awards Study.
Many members feel that, for those who embrace the concept of rehabilitation and who apply the code, the next burning question is: "Whom do I use?"
There are a number of possible projects, ranging from a directory of resources to a more positive promotion of case management services. More consultation is needed before deciding on the best route forward.
One aspect on which all members can agree is that rehabilitation is in everyone's interest. Nevertheless, practitioners on both sides still need to be sold that message and will need practical help. The whole subject of rehabilitation is vast; the working party recognises that it can only move forward a step at a time.
The Code of Best Practice is a step in the right direction.