Insurers stump up millions to lock claimant lawyers out of PI sector

Insurers are putting up £15m to set up the portal that will field personal injury claims from litigants in person, it has been revealed.

Dominic Clayden, chief executive of the Motor Insurers Bureau, said today his organisation is continuing to build the system with the intention to implement it from next April.

The reconstituted portal, entirely funded by insurers, is required because the Civil Liability Act will prompt the small claims limit to increase to £5,000 for RTA claims. In effect, that will mean costs cannot be recovered from defendants for cases worth up to £5,000 - the vast majority of RTA claims - and most claims will be pursued by unrepresented people through an online system. 

Clayden, speaking at the Association of Personal Injury Lawyers conference in Birmingham, said the portal will require further ongoing finance to fund a call centre for people who have queries about the process. Consultants from accountancy firm Deloitte have been drafted in to advise on project management and IT support. 

Clayden confirmed that the system will undergo beta testing from late October, then go live from April. It will apply only to accidents happening after that date. Clayden gave few practical details about how the portal would work, but he did say the Ministry of Justice intends for it to apply to claims involving children.

One potential issue for the new system will be how litigants in person will access medical reports commissioned through the MedCo process. Currently, legal representatives choose a medical expert to assess their client from a range of diagnosis providers, but this will be a task left to unrepresented portal users in future.

Another issue is who pays for the report: insurers have indicated they would fund reports up-front where liability is admitted, but the position is less clear where liability is denied. There is thought to be little appetite among medical organisations to provide services to claimants without being paid in advance. Bob Neill MP, chair of the House of Commons justice committee has written to the MoJ this month raising concerns about how people of limited means would be able to finance court fees and expert reports.

A four-week government consultation on how to ensure MedCo can be incorporated into the new portal closes today. 

One respondent, First4Lawyers managing director Qamar Anwar, said: ’While it appears sensible for the MoJ to extend the MedCo system to unrepresented claimants under the Civil Liability Act regime next year, there are several questions left unanswered. This seemingly simple solution proposed by the MoJ actually exposes how poorly thought-through the whole reform process has been in the pursuit of a discredited policy that will ultimately only benefit insurance companies at the expense of injured people.’

Speaking at the APIL conference, Law Society vice president Simon Davis warned about taking legal representatives out of the process. ‘I don’t want a future where the injured reach for their mobile, dial a number and the answer coming from it is an automated voice,’ he said.