Whiplash reform: CILEX raises concerns over settlement times

Concerns over rising settlement times for those seeking compensation for whiplash injuries using the Official Injury Claims (OIC) portal were raised by CILEX in its response to the Justice Committee’s call for evidence on the impact of the 2021 whiplash reforms.

CILEX was opposed to the Ministry of Justice reforms, which increased the small-claims limit for road traffic accidents from £1,000 to £5,000 and implemented fixed damages for injuries that last up to two years.

CILEX’s view was that access to justice for injured people would potentially be restricted, that those claiming should be provided with legal advice and that the fixed tariff of damages was not necessary and overlooked the complexity of each individual case.

A survey of members showed that most disagreed that the OIC – which went live on 31 May 2021 – has improved access to justice, with its complexity deterring some people from pursuing claims.

CILEX highlighted the importance of concluding personal injury claims as fast as possible and pointed to recent OIC quarterly data that showed average settlement times steadily increasing, from 45 days in the early days of the OIC to 227 days by the end of 2022.

“Whilst CILEX appreciates that the OIC predicted the rise to this point and beyond, we are concerned that this is being seen as a norm, with average settlement times pushing closer to taking three-quarters of a year to resolve,” CILEX said, arguing this could add “yet further pressure to an already strained legal system”.

While CILEX supported the increased use of technology, members questioned the ability of claimants to engage with the OIC, stating that lay persons/claimants were not able to “effectively collate” the evidence required for a claim and that claims were often far too complex and intricate for the average injured person.

This is why, despite the OIC being built so that injured people could run their own claims, more than 90% choose to use a lawyer to assist them. But the economics of system, with no costs recovery – meaning clients have to pay lawyers out of their damages – explained why small and medium-sized law firms are dropping out of the whiplash claims market, as the work becomes less financially viable.

This could, CILEX said, lead to “reduced consumer choice” and “monopolisation of the market by larger, more equipped firms”.

CILEX urged ongoing monitoring to ensure the portal was, and remained, fit for purpose, and said that “the effect on access to justice should remain under review as the use of the OIC could be creating market monopolies for those offering advice and the complexity of the portal could be preventing certain members of the public from engaging with the system in the initial instance”.

While some members felt the OIC provided a platform for parties to focus on negotiation as well as early settlement, it was also noted that it could result in “non-standard remedies being overlooked and unemployed”.

CILEX also called for “further guidance and signposting” to reduce user confusion.