Briefing: Fraud red flag will remain for personal injury claims despite OIC portal launch

By Editor Katie Scott

It has been with much trepidation and bated breath that the insurance industry has waited for the arrival of the Official Injury Claim (OIC) portal, formerly referred to as the Litigants in Person (LiP) portal – undoubtedly a central component of the Civil Liability Act’s part one reforms.

Since the latest round of rules were published in late February, the personal injury market has been agog with webinars in a bid to share understanding, interpretations and best practice. Or as Kennedys’ partner and head of motor Ian Davies describes it, putting colour around the grey areas.

Although the insurers I have spoken to so far seem relatively calm and prepared despite the upheaval of the new system (here’s looking at you Aviva), other industry players have highlighted a myriad of potential concerns; one inescapable red flag is the very problem the portal was attempting to fix - fraud.

There is a decided, nail-biting nervousness around the possible uptick in non-whiplash injuries as claimants seek to obtain greater compensation amounts outside of the restraints of the new whiplash injury tariff table.

Martin Stockdale, a fellow Kennedys partner, believes that opportunistic fraud could also be on the up post-portal implementation due to insurers’ reactions to possible fraud – in a recent webinar, he explained that due to the lower value of whiplash claims, some compensators may opt to pay out on potentially fraudulent claims rather than fight them because this is the cheaper and easier course of action under the new portal regime.

However, this behaviour could create new fraud opportunities.

Stockdale added that although the OIC portal is designed to help reduce fraud, it won’t automatically change societal expectations and the broader ‘compensation culture’.

This was a trend also discussed at Insurance Times’s last Fraud Charter event. Even David Parkin, deputy director for civil justice and law policy at the Ministry of Justice (MoJ), thinks there will be “unintended consequences” following the portal’s launch.

Some industry voices also question whether part one of the reforms will actually work. During Kennedys last webinar on 17 March, only 46% of the online attendees agreed that the reforms will deliver their intended purpose – a notable decrease on the 57% that agreed with this statement just a week beforehand.

To me, there seems to be more weariness around the portal’s launch than excitement – this could be due to the constant delays so far, the rush to reach the final finish line now a date is confirmed, or simply because many within the sector feel they have more questions than answers when it comes to the portal’s functionality.

I don’t believe fraud will reduce as a result of the OIC portal – despite the ban on pre-medical offers. Instead, fraud will morph and evolve and find new ways to flourish in a post-portal world, for example through additional injuries or rehabilitation.

It’s up to the industry to be on the front foot here – if system changes and operational amendments are already happening, why not review and strengthen fraud protocols too? Those within the personal injury sector seem well versed on the fraud risks ahead, but how promptly they plan to tackle them may be one more unanswered question.