Important Notice to Clients.
Administration of Motor Claims.
Ministry of Justice Reforms - Personal Injury Claims.
Background:
The Ministry of Justice (MoJ) is introducing a fast track process for road traffic personal injury claims, valued between £1,000 to £10,000 arising from accidents occurring on or after 30th April 2010 in England and Wales. The fast track process aims to settle low value road traffic personal injury claims quickly and reduce solicitor costs which have escalated significantly in the last few years.
The major changes are;-
- claims information will be shared electronically
- liability decisions should be made within 15days as opposed to 90 under the present protocol
- legal costs will be fixed and recoverable on a staged basis
How will these changes affect your Motor Insurer?
The reaction to these changes from the motor insurance market has been mixed. All accept that eventually the new protocol for handling road traffic personal injury will change. However the pace of change varies from insurer to insurer.
Once all insurers fully embrace the new protocol it is estimated that the fast track process will affect 85% of motor personal injury claims. Consequently, the new process will greatly affect the way in which a large proportion of claims are handled and therefore we require help and support from you to ensure that genuine claimants who have suffered personal injury following a road traffic accident are dealt with in a fast and equitable manner.
Your help is required:
It is now increasingly important for us to receive prompt notification of road accidents to ensure that the fast track process is effective. The aim in conjunction with your motor insurer is to identify liability enquiries and complete them in anticipation that a third party injury claim is likely to be received via the MoJ process.
We know it will not be possible to approach every claim in the same way, but wherever possible we need your co-operation with the following;-
- If liability appears straightforward your insurer will go ahead and admit liability without contacting you first. We do however understand this may sometimes cause you difficulty.
- If enquiries are needed your insurer may wish to contact your driver direct. This will help to resolve questions surrounding the accident and ensure that the matter is dealt with within the prescribed timescales.
- If you wish to be involved with enquiries you revert back to either us or your insurer quickly by either telephone or email. We will let you know in each case the deadline for your response.
- In some cases your insurer might go ahead and concede liability within 15 days, without further contact with you, if they have not had a response within the prescribed timescales.
- If you or your driver fails to report the accident your insurer may have little option other than to admit liability.
- In most instances the Motor Insurance Database (MID) will be used to identify the relevant insurer. It is therefore essential that vehicle additions and deletions are notified on a timely and accurate basis.
How does this new protocol benefit you, your employees and the passengers carried in your vehicles?
Delays in settling road traffic personal injury claims have led to higher awards. The delays settling claims have allowed legal costs to become disproportionally high to the level of compensation. It is now not uncommon to see the legal costs add between 30% to 60% on the total cost of the settlement. These costs are passed directly back to the motor insurance companies and then back to the policyholder through inflated claims experience and higher premiums.
Fast tracking claims where the level of compensation is likely to be below £10,000 will in the long term help Insurers to contain escalating claims cost. Containing costs will help keep future requests for premium increases to a minimum. In the current economic climate Insurers are now looking for their employees to underwrite business profitably. They are no longer enjoying the high rates of return from investment income and are keen to maintain value for their shareholders.
At BJIB we will endeavour to remind our clients of the importance of reporting possible personal injuries to drivers, passengers and/or third parties at the earliest opportunity. This will be initiated from when the accident is reported to our Call Centre. If however you elect not to use our Call Centre it is imperative that an accident where you suspect a bodily injury claim may materialise is reported to us at the earliest opportunity.
Jeff Bloxsome
Director – Motor Claims.
20th April 2010.
