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Claims

The OIC process one year in — what do we know?

Have the 'Whiplash reforms' and the launch of the OIC Portal proven to be successful?

31 May 2022 marked the one year anniversary of the launch of the “OIC Portal” and the latest tranche of whiplash reforms, being chiefly:

  • An increase in the small claims track limit for adult vehicle occupants (and so the removal of an entitlement to recover solicitor’s costs for most claims made by that group), and
  • The tariffing and reduction of damages payable for whiplash injuries lasting less than two years.

So has the OIC Portal and those reforms been a success?

The objective of the reforms was simple: to reduce the high costs of motor insurance premiums. That was to be achieved by reducing the number of whiplash claims and that, in turn, was to be achieved by reducing the amount of damages recoverable for whiplash lasting less than two years and by removing the entitlement to recover costs for the largest group of motor accident claimants. The thinking was that less damages and no costs would reduce the likelihood of spurious claims — often encouraged by those with an interest in the costs payable — and dampen the claims culture generally.

The reforms were controversial. Removing solicitors from a process which has historically almost exclusively been undertaken by experienced and qualified representatives inevitably meant that, for the new claim process to be considered a success, it had to be capable of being used by members of the public in as equally effective a manner as experienced representatives had enjoyed previously. That meant resolving disputes and compensating victims quickly with minimal friction. 

Success, therefore, might be determined by considering two things: whether the number of minor motor accident claims reduced as a result of these reforms, and the extent to which successful outcomes are achieved by members of the public pursuing claims themselves relative to those with representation. 

Claims submissions

Ministry of Justice (“MoJ”) data for the first 10 months of the OIC Portal operation (being all that is currently available) reveals that 209,442 claims have been submitted to the OIC Portal in that time. That figure is expected to have reached 260,000 by the one year anniversary (data to confirm is awaited).

For the three full years prior to March 2020 – being when COVID restrictions took effect — the number of injury claims following road traffic accidents both registered with CRU and submitted to the RTA MoJ Portal was incredibly consistent, at an average of 660,000 per year.

COVID took drivers off the road and changed driving habits so will have had a commensurate impact on accident rates and claim numbers. Indeed, at the ABI conference on the impact of these latest Whiplash Reforms ‘one year post launch’, held on 24 May, the MoJ stated that in the only full year for which statistics are available post-COVID (i.e. after March 2020) just over 430,000 claims were submitted to insurers, a drop of roughly one third. With COVID restrictions now largely behind us, Department for Transport (“DfT”) statistics indicate that traffic levels are largely back to their pre-COVID levels (despite the increase in those working from home) but claim numbers have not returned to pre-COVID levels.

In March 2022, being the last full month of the 10 months for which the MoJ has released OIC data, 26,436 claims were submitted to insurers via the OIC Portal. 8,000 were submitted via the MoJ Portal, giving a total of 34,436. That was the highest number of claims submitted via the two portals since the launch of these reforms and suggests an annual total claims submission figure of over 413,000.  The current estimated average is therefore over 96% of the post-COVID/pre-reforms total but still a third down from what they were prior to March 2020. 

Claim numbers are clearly significantly down but it is difficult to say if that remains a hangover from COVID, is due to technical problems with the OIC Portal or slow throughput, or whether it is indicative of the ‘success’ of the reforms reducing the number of spurious whiplash claims. It is too early to draw conclusions but the architects of the reforms might call the trend ‘success’.

Representation 

The MoJ estimates that less than 1% of claimants pursued their own claims prior to the reforms. That figure is now fairly stable at 9%. It remains to be seen whether the percentage of ‘claimants in person’ increases as the wider population begins to understand how the OIC process works, becomes confident in its use and appreciates that it is ‘cost free’. The number of unrepresented claimants is certainly much higher than the pre-reform position but lower than the 30% estimated in the impact assessment.

Within one percentage point either way across all quarters, 76% of those who chose to be represented used law firms. 24% used ‘ABSs’. CMC involvement has been negligible at 0.2% across all quarters. 

Injured adult vehicle occupants with minor injuries clearly remain attractive clients to solicitors despite the removal of costs. Perhaps not what was hoped for.

Outcomes

But what about outcomes? Can the OIC Portal be used equally as effectively by claimants in person as it can by those with representation?

There is little evidence that the OIC process is failing for those without representation relative to those represented.

Exits                 

18,769 (8.9%) of all claims submitted have been removed from the OIC process by claimants (Withdrawn) or compensators (Removed). Reasons claims might leave the OIC process include:

Withdrawn (claimant options)

Removed (compensator options)

Instruct solicitors (where previously unrepresented)

Overall claim value exceeds £10,000

Injury exceeds £5,000

Duplicate

No longer wish to claim

 

Complexity

Overall claim value exceeds £10,000

Injury exceeds £5,000

Fraud/Fundamental dishonest

Causation (after medical received)

Agreement reached outside the portal

 

Unrepresented claimants have fairly consistently withdrawn 3-4% of all claims they submit.  Represented claimants removed fewer at first (1.9% in Q1 and 1.4% Q2) but that increased to 4.2% relative to submissions in Q3. So claimant withdrawals seem fairly equal irrespective of representation.

Compensator removals in Q3 were 7.2% (relative to submission numbers) for unrepresented claimants and 8.1% for those represented, again suggesting no prejudice to those without lawyers.

Deducting the 18,769 claims Withdrawn or Removed from the total submissions gives 190,673, meaning 91% of the 209,442 claims submitted remained within the system (albeit a ‘decision’ on whether to remove or withdraw might not have been made on some).  Success some might say.                      

Liability

Unrepresented claimants do better with 93-94% consistently receiving a full admission, compared to between 84% (Q1) and 81% (Q3) for represented claimants.

Settlements

Settlements generally have been slow. 17,607 claims overall have settled and are marked ‘closed’ on the system. The data also reveals 2,299 claims settled but are not marked as ‘closed’. Overall, those 19,906 amounts to 9.5% of all claims submitted. 436 settled in Q1 (≤1% of all submissions), and 3,904 had settled by the end of Q2 (3.4% of all submissions).

Uplift

Up to a 20% uplift on the tariff award for whiplash can be awarded in exceptional cases. 77% of all represented claimants included a claim for uplift in their claim whereas only 62% of unrepresented claimants sought a claim for uplift in the last quarter. The lack of any guidance on when the uplift should be sought and will be awarded no doubt accounts for the variance. That anomaly should correct itself as guidance emerges and forms part of the user guide follow by most claimants in person.

Overall conclusions

The OIC Portal is being used in big numbers. In the last full month for which data is available — March 2022 — 77% of all submissions to both the OIC and MoJ Portal were made to the OIC Portal. And claims are staying in that process, by and large (91%).

It is clearly, therefore, meeting the objective it had to become the primary ‘non-costs recovering’ process via which motor injury claims are processed.

Total claim numbers suggest that the OIC Portal is broadly operating as its architects would have hoped. Whether those reduced numbers indicate that the OIC process has achieved its primary desired aim of reducing claim numbers arising out of minor road traffic accidents is difficult to tell at this stage, with COVID and driving habit considerations factored in, but claim numbers are certainly down. A better review will be possible in a further 12 months.

Outcomes currently seem fair too, comparing those unrepresented to those with representation.

The next test for the OIC process is whether it can increase the numbers being settled and the extent to which the litigation process functions effectively for those without lawyers.

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