Written evidence from Forum of Insurance Lawyers (FOIL) (MI0016)

 

FOIL (The Forum of Insurance Lawyers) exists to provide a forum for communication and the exchange of information between lawyers acting predominantly or exclusively for insurance clients (except legal expenses insurers) within firms of solicitors, as barristers, or as in-house lawyers for insurers or self-insurers. FOIL is an active lobbying organisation on matters concerning insurance litigation.

 

FOIL represents over 8000 members. It is the only organisation which represents solicitors who act for defendants in civil proceedings.

 

Executive Summary

 

 

 

 

 

 

 

 

 

 

Introduction

  1. With significant experience of handling, for defendants and insurers, a wide range of claims arising from road traffic accidents, FOIL member firms have taken a keen interest in the developments in the handling of such claims over the past two years. Following the publication of the Transport Select Committee’s reports in 2011 and 2012, FOIL welcomed the opportunity to submit evidence to the Select Committee earlier this year, and to give oral evidence at the hearing on 17 June. It has followed carefully developments since then, including the Select Committee’s report in July.

 

  1. FOIL has read with interest the proposals put forward by the Government in its Command Paper, responding to its consultation on ‘Reducing the number and costs of whiplash claims’ and responding to the Select Committee’s own report.

An accreditation scheme for expert witnesses

 

  1. FOIL welcomed the initial recommendation from the Government that there should be an accreditation scheme for medical practitioners providing medico-legal reports, and welcomed the support for that proposal from the Committee.  It is pleased to see that the creation of a scheme forms the basis for the Government’s plans going forward and welcomes the opportunity to work closely with the Government to develop the details of the scheme.

 

  1. FOIL is one of the industry stakeholders supporting the cross industry consensus paper on whiplash, which the Government will be examining further in taking forward its proposals. A copy of the paper has been made available to the Select Committee together with this submission.

 

  1. Although the Government has indicated that it favours some element of peer review for reports produced by accredited doctors, it has given no further indication of how the accreditation process will be established and run. In FOIL’s view robust governance will be essential, to put in place an effective process to screen applicants for accreditation at the outset; to allow stakeholders to call for an audit of an accredited expert’s performance; and to remove accreditation if the expert is found not to have met the scheme’s standards. The consensus paper sets out accreditation criteria and proposals for random audit and specific review which FOIL would like to see adopted.

 

  1. On the issue of information to be provided to the expert, as set out in the consensus paper, FOIL strongly believes that an account of the accident from both the claimant and the defendant must be available to the medical expert.

 

  1. The issue of making the claimant’s medical records available to the medical expert is less clear cut, as disclosure builds additional costs into the process which are not always justified. FOIL supports the proposal in the consensus paper that medical records should be reviewed as a matter of course when the prognosis given is for more than 9 months; and that the MOJ portal process should allow the defendant to request medical records on a case by case basis on the understanding that it will bear the additional costs incurred. This would allow defendants to examine records where there are doubts over causation or concerns over fraud or exaggeration but would avoid unnecessary costs in routine cases where the defendant believes that the examination of the claimant will provide the information it requires.

 

  1. As the Government notes in its recommendations, it is important that best practice is adopted in carrying out medical examinations. FOIL is keen to ensure that accredited medical experts receive training in biomechanics, to understand the mechanics of injury, and have access to the latest research on vehicle safety from bodies such as Thatcham Research Centre.

 

  1. FOIL welcomes the Government proposal that the accreditation system should apply to whiplash and “similar soft tissue injuries such as those to the back and neck”. The same system should also apply to psychiatric injuries arising from low value RTA claims. This type of claim is on the increase and the same issues of subjective symptoms, difficulties in diagnosis and the potential for fraud all apply in the same way as for whiplash: it would leave a large loophole in the scheme if these injuries are not subject to the same vigorous regime as physical injuries.

 

  1. On the evidence to be provided by the claimant, whilst the fact that a claimant sought medical assistance after the accident may be useful evidence in some claims, FOIL is concerned at the wider consequences if this were required in all cases. It is likely that it would quickly become common knowledge within society that a claim could not be made without a hospital or doctor’s appointment immediately after the accident, encouraging the fraudulent as well as the genuinely injured to attend, creating a significant additional burden on A&E  departments and GP practices already struggling to meet demand. Aside from the fact that the injured party had sought assistance, it is unlikely that such appointments would yield any useful information, suffering as they would from all the shortcomings of a medical reporting system relying upon doctors in practice. FOIL believes it would be more beneficial to focus resources on improved medico-legal reports prepared by specialist experts. On a financial level FOIL would be concerned that these routine visits would come within the Road Traffic (NHS) Charges Act 1999, with the cost to be paid by insurers, indirectly increasing the costs of claims.

 

  1. On the issue of a standard medical report form, FOIL takes the view that as long as the standard information required is captured, it is not essential for a new standard form to be produced.

 

  1. The Government has indicated that it will “work at pace” with stakeholders, to implement improvements in medical reports “next year”.  Understandably, bearing in mind the raft of issues to be considered, it has taken a number of years to reach this stage but now that firm proposals have been put forward FOIL would like to see immediate progress, with a formal timetable introduced to steer the reforms and ensure they are introduced as soon as possible.

 

 

 

The cost of medical reports

 

  1. The Government has indicated that the scope of the accreditation scheme may extend to setting prices for reports. At present, whilst the Medical Reporting Organisations Agreement (MROA) sets rates for the production of reports, not all reports are produced under the agreement, leading to inconsistencies, increased prices and the use of court time to consider the appropriate costs in individual claims. This issue was considered by the Civil Procedure Rule Committee (CPRC) in April this year but it did not believe that it should set rates in accordance with the MROA as the agreement is not agreed nationally. Instead, the CPRC invited the Ministry of Justice “to consider how the high costs of fees for experts’ reports could be reduced in order to bring down the overall costs of litigation”.

 

  1. This is an issue which goes beyond low value road traffic claims but the setting of fixed fees in that area should be straightforward and would have a significant impact in reducing costs and streamlining the court process. As this has already been raised with the MOJ, FOIL would like to see progress being made on this issue immediately, without waiting for the full accreditation scheme to be developed.

 

The judicial response to fraudulent claims

 

  1. The Committee noted in its report the issues arising from the Supreme Court decision in Summers v Fairclough Homes. In that case, although the court recognised that claims which are exaggerated may be struck out in “exceptional circumstances”, it declined to find that the exaggeration of a claim ten-fold warranted strike-out and allowed the claim to continue.

 

  1. The Committee noted in its last report that the issue was complex, a view shared by FOIL, as there is no clear definition of a fraudulent claim and it is unclear how to differentiate fraudulent exaggeration from acceptable litigation or negotiation tactics. 

 

  1. As the Committee will be aware, the Law Commission has suggested that the issue of third party fraud might form part of its Twelfth Programme of reform. FOIL would support that proposal. FOIL indicated in its response to the Law Commission’s consultation on the programme that it believed the issue met all of the criteria for consideration by the Law Commission: it causes substantial unfairness; fraudulent claims cause disproportionate costs; the issue is complex; and fraudulent claims are resolved currently in accordance with principles that are inconsistent with modern standards.

 

  1. The Ministry of Justice has a major part to play in an examination of the law on fraudulent and exaggerated claims. FOIL sought to have the issue included in the Law Commission’s Eleventh Programme of reform but, at the time, the MOJ did not believe there was sufficient support for a change in the law and without its endorsement the Law Commission would not consider the issue further. The issue and consequences of fraud have become much more prominent over the past two years and it is to be hoped that the MOJ can now be persuaded that this is an issue where there is support for a change in the law and which, therefore, should be considered by the Law Commission as soon as possible.

 

Further reforms

 

  1. FOIL would like to give its support to two specific issues, one currently within the Government’s proposals and one which has not yet been adopted.

 

  1. Inducements to make a claim

It is already recognised, by a ban on the practice by CMCs, that it is undesirable for potential claimants to be offered an immediate inducement to bring a claim. Inevitably some claimants will be encouraged to make a fraudulent claim by the promise of an immediate benefit, before they have had a chance to think through the consequences of such a step. FOIL believes that the ban should be extended to law firms to completely outlaw this practice.

 

  1. A halt to the rise of general damages

When asked during the course of giving oral evidence to the Committee, what compensation would be appropriate for a whiplash injury, James Dalton from the ABI replied that it was “whatever society determines is the right amount which will then be built into insurance premiums”. FOIL would suggest that, bearing in mind the heavy burden claims place on motorists and the current concerns over the high cost of living, society may reasonably consider that the current level of compensation for whiplash claims is adequate. Without intervention the level of damages set out in the Judicial College Guidelines will continue to rise. FOIL would suggest that steps should be taken to ensure that, for a period, damages in low value RTA claims should not rise further. This is a matter which ultimately will need to be considered by the judiciary but FOIL would welcome the Committee’s examination of the issue.

 

December 2013

 

 

 

 

 

 

 

 

1