Zurich Insurance is urging the government to speed up its reform of the procedures for personal injury claims amid a very slow compensation process.
The insurer’s analysis revealed that an estimated £240 million worth of personal injury compensation is currently tied up in the litigation process, with claimants having to wait for 62 weeks on average to be heard in court.
Meanwhile, the COVID-19 pandemic has exacerbated the court backlog, both in the small claims and fast track processes, according to official figures. Between April and June 2020, only one-fourth of the normal volume of trials was held.
Each year, around half a million whiplash claims are filed the UK (with an average value of around £3,000). Furthermore, even when cases stay in the Ministry of Justice process, a dispute over valuation may lead to claimants having to wait up to nine months for a Stage three determination, Zurich said.
As a result, Zurich has called on the government to publish the rules and procedures for the new litigant in person whiplash portal as soon as possible. This will enable the insurance industry to study these rules and ensure that systems, policies, and procedures are thoroughly prepared and tested before they come into effect in April.
In March 2020, the government said that “no practicable solution” could be found for the Alternative Dispute Resolution process. Zurich believes that the government must prioritise the introduction of a workable solution to resolve disputes.
“Pressure on court capacity as a result of the pandemic is 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,” said Calum McPhail, head of liability claims at Zurich. “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 pay-out.”
In response to Zurich’s research, the Chartered Insurance Institute issued a statement through chief membership officer Keith Richards.
“COVID-19 has had an exceptionally high level of impact on our society and way of life, and so while we should not be surprised that it is affecting the justice system, we should all be rightfully concerned,” he said.
“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.”
