MoJ decide on independence of medical experts and on reducing cost of whiplash claims
4 August 2014
This morning the MoJ have released important new information as to how they are taking forwards the incoming changes which are geared to bringing greater objectivity and lower levels of cost into medical evidence in whiplash claims. While the changes are limited to whiplash claims where the primary issue currently lies, it is informative for insurers responding to all types of claim to be aware of the changes, as in the future there is reason to hope that similar changes may be introduced into all types of injury claim.
The information now available
What we now have are the changes to both the rules and the practice directions, as well as to the RTA Protocol which governs these claims in the portal, in addition to the supporting background information from the Minister and a press release from the MoJ which includes its response to the last consultation.
The current changes of which we have the detail will come into force for new CNFs submitted to the RTA portal on or after 1st October. So they will not affect current claims.
As has happened with other changes of this type announced in advance, the likelihood is of an increased number of CNFs being submitted to the RTA portal this month and next, to take advantage of the current regime.
The important issue is of independence of medical reports and the writers of those reports. Some of the changes on this are being introduced for new CNFs submitted from 1st October, while others are still being progressed, and the government’s intention there is to have those additional measures in place by the end of the year.
Types of claim affected
The reforms will impact on “soft tissue injury claims” which means “a claim by an occupant of a motor vehicle where the significant physical injury caused is a soft tissue injury and includes claims where there is a minor psychological injury secondary in importance to the physical injury”. A wide enough definition to include the vast majority of whiplash cases, though there will no doubt be argument in some cases around that definition, especially as to whether a psychological injury is or is not “secondary”.
Limiting medical evidence
These are the new restrictions.
Firstly, CPR Part 35 which limits generally the use of expert evidence has been rewritten to say that permission will normally only be given to the use of one expert in this type of claim, whose evidence must be set out in a “fixed cost medical report”.
Secondly, the expression “fixed cost medical report” is also used to exert control over the degree of independence currently being provided and which will be taken further by the additional reforms planned for the end of the year. For the moment, the report writer must not have provided treatment to the claimant, must not be associated in a business sense with anyone who has provided treatment, and cannot propose that they or any person associated with them should provide treatment in the future.
This change should be of particular help in tackling the problem of certain recently-launched claimant business models adding to the cost of claims by referring their clients for unnecessary CBT or physiotherapy. Also relevant to that is the work which has started on reviewing the Rehabilitation Code which is used by some claimant representatives to justify those practices, in which DWF Director, Carole Chantler, is involved.
Restricting the cost of medical evidence
The price of the fixed cost report is limited to £180, quite a reduction according to Mr Grayling who is working on the basis that currently costs of up to £700 are claimed. This low level of cost should ensure claimants are motivated to obtain GP or physio reports which are priced separately in the proposals at the £180 figure. In fact, GPs are likely to be the primary source for these reports. No longer is there a suggestion that this first report could alternatively be from an orthopaedic consultant at £240 more.
Where, unusually, the claimant thinks that the costs of a second report can be justified, the cost of this too is restricted, to £360 for an A&E consultant or to £420 for an orthopaedic consultant.
Recovery of costs at this level assumes then that the report is indeed a fixed cost medical report. If the report obtained does not meet that definition then the cost of it should not be recovered. And any Stage 2 settlement pack including a non-compliant report will be of no effect.
Defendant accident versions
There is a new provision for the defendant to get its account of the accident before the medical expert instructed by the claimant. Paragraph 16A of the RTA Protocol will say that although it is envisaged that it will only be done in a limited proportion of cases, where the defendant wishes to do this then at the same time as providing its liability response within the portal at Stage 1, it should email the claimant’s representative with its version of events, and in doing so the defendant’s representative will be confirming that it has the defendant’s authority to do so.
For now, the government’s intended change in this area is to be dealt with partly through the Part 36 processes, and it is therefore only pre-med offers made as Part 36 offers that will be affected by this particular change. The revised Part 36 regime will say that where a defendant makes a Part 36 offer before it has been sent a fixed cost medical report by the claimant, the usual Part 36 period of 21 days to consider any offer does not start running at that point, and in fact will only start when the claimant sends the defendant that medical report.
If the insurer’s offer was not to be made as a Part 36 offer anyway, then the part of the incoming changes affecting the costs consequences of a pre-med Part 36 offer would not directly impact.
But perhaps more significantly the RTA Protocol is having an additional aim written in, that is to seek to ensure that any type of offer is only made once a fixed cost medical report has been obtained and disclosed. This aim does not just affect Part 36 offers but will include the usual offer that would be made inclusive of any legal costs rather than in addition to them. Once again, these changes impact whiplash claims only and do not affect other types of injury claim.
The MoJ are still keen to prohibit pre-med offers, at least in whiplash claims, and see the changes they are making as “strongly discouraging” the practice. The Minister says he wants to work further with the industry “to tackle the issue effectively.”
While it is questionable whether the steps taken currently do in fact go as far as prohibiting insurers from making pre-med offers in whiplash claims, it would have to be accepted that once the changes are introduced, making an offer of this type would not meet with one of the aims of the Protocol. The position may be put beyond doubt by further discussions with the MoJ as is proposed. The point currently remains that not all of the MoJ’s proposed reforms on independence are yet in place, and surely they are part of the equation as to why going forward insurers should have more confidence in the new system of obtaining medical evidence and so in turn see less need to make pre-med offers.
Further steps on independence
The new part of this package of reform is intended by the MoJ to be in force by the end of the year, but until these extra measures are in place there will remain concerns on the part of insurers regarding the independence of medical reports being relied on.
The government still have the courage of their convictions and intend to secure independence of report writing by prohibiting either party “from having a financial interest in an intermediary through which a medical report is obtained”, in tandem with an accreditation and re-accreditation system involving peer-reviews and auditing of reports. Interestingly, the intention is to develop a new system of “random allocation” of new instructions. Further work is needed to achieve these worthwhile goals which if they can be realised should be useful in securing a more secure evidential platform for reports.
Mr Grayling refers in his press release to the latest data on motor insurance costs from the AA released at the end of the last month, which show a 19.3% fall in the last 12 months, and which the AA describe as the biggest ever annual drop. However, the AA go on to predict that the downward trend will end late this year or early next when policy costs will start rising again, unless the government is able to achieve a significant reduction in the exaggerated or fraudulent whiplash claims. He sets the latest reforms against that background.
So, the reforms at this first stage for whiplash claims new to the portal from 1st October look worthwhile in terms of moving towards independence of reports and medical experts, and in restricting the number and cost of the reports. Hopefully, the further changes later in the year will take independence further forwards too. As to pre-med offers, there is now discouragement to using them, at least for claims entering the RTA portal after 1st October, which may be more understandable against the background of the other changes which are happening and which are designed to instil a greater degree of confidence in the medical evidence processes, and to assist in the fight against fraud. All of these reforms impact “soft tissue injury claims” submitted to the RTA portal only at this stage.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.