Whiplash reform could lead to ‘claims in other guises’ says DLG’s head of claims

Direct Line Group’s managing director for claims Jessie Burrows has warned that the upcoming implementation of the delayed whiplash reform could push claims to “appear in other guises” as claims management companies hunt for fresh opportunities for their clients to submit non-whiplash, motor-related claims.

Burrows is referring to Part one of the Civil Liability Act, known colloquially as ’the whiplash reforms’, which has been spearheaded by the insurance sector to create a simpler, frictionless personal injury claims process.

This includes a new Litigation in Person (LiP) portal, whereby claimants can process their own personal injury claims online, up to a revised £5,000 limit, without the aid of a solicitor; this is an increase on the previous £1,000 small claims limit.

The Act, which gained Royal Assent in December 2018, also allows for a new tariff table, listing set damages for whiplash injuries that impact claimants for between three months and two years; this strives to clarify compensation levels.

The launch date of these reforms has been pushed back twice, most recently to April 2021 in response to the Covid-19 outbreak and pandemic-related priorities. This is a whole year after it was originally meant to come into force.

Burrows told Insurance Times that the reform will “take a while to bed down” and that insurance professionals “can’t rule out the fact that claims might arise in different places as well”.

She said: “Whilst [the reform] might solve whiplash, there’s always the chance that claims might appear in other guises, which everyone in the industry is very focused on. What does that then mean? What’s the second order impact of that?

“It could be that rather than a whiplash claim, you get a different type of injury-type claim that is difficult to prove, or there might be other points in the supply chain that somehow get impacted, or it might be nothing to do with insurance at all.

“It might well be that people or claims management companies look for other areas in which their customers will submit claims.

”I think that’s a key thing because it could well arise in somewhere completely unexpected, not even in motor.

”So, like all insurers, we’re in a ‘watch this space’ [mode] to see what happens.”

Good work

Despite this stark warning about a redirection of claims activity, Burrows wholeheartedly approves of the work done on the reform project to date.

She continued: “At its heart, there’s been so much good work done by the government, by Medco, by the ABI, etc so it will be good when that comes in because absolutely it will make the process much clearer - it should benefit customers.”

She further advised that because the new system will not be backdated, only applying to cases occurring after the implementation date, “there will be a bit of time and adjustment” that is needed following the reform’s launch.