By Martin Croucher

Law360, London (April 1, 2020, 8:42 PM BST) -- The U.K. government's landmark digital drive to modernize small insurance claims disputes has now been delayed twice, and experts say the coronavirus pandemic is only complicating an already lengthy to-do list before the whiplash portal is up and running.

The new Civil Liability Act, which introduces reforms to the way claimants seek damages for small road traffic injuries like whiplash, was postponed earlier this year to August. It was originally planned to go live in April 2019, before being pushed back to April 2020.

But experts say there remains a huge amount of work remaining to be done ahead of that new deadline, including the drafting of detailed legal rules on how the changes will work in practice.

And disruption from the novel coronavirus only further threatens that timeline, potentially causing access-to-justice problems for many and putting new burdens on courts.

Shirley Woolham, chief executive at personal injury solicitors Minister Law, said she doesn't think anyone on either the claimant or the defendant side believes the reforms are still on track for launch in August because the coronavirus crisis has redirected priorities.

"The longer the crisis goes on, the more likely the delay, because there will be little time or bandwidth available to resolve a host of outstanding issues with the current model," she told Law360. "These include liability resolution, rehabilitation and credit hire, medical reporting, interim payments, valuing injuries and setting the tariff. None of these are minor issues."

Another delay delivers one more setback for the government's efforts to streamline small insurance claims for the future using an online portal to process claims under the Civil Liability Act. The legislation emerged after years of lobbying by insurers concerned over a growing number of low-value personal injury claims in recent years, many of which go uncontested in court.

According to data compiled by insurance law firm DWF LLP, there were 60,303 new road traffic personal injury claims submitted to courts in January, an 18.5% increase from December 2019 but a 3.4% fall on the same period last year. There were 694,718 road traffic accident claims total in the last complete year, 2018 to 2019.

The changes in the Civil Liability Act will now mean that people making motor-related personal injury claims of up to £5,000 ($6,100) will instead file their complaints on an online injury claims website built by the Motor Insurers' Bureau, a quasi-governmental body that is funded by the insurance industry.

The government says the £5,000 threshold, up from a previous limit of £1,000, will cut fraud and reduce litigation costs for insurers, driving down insurance premiums by an average of £35 a year.

Crucially though, the Civil Procedure Rules Committee, under the Ministry of Justice, has yet to publish a set of legal rules and tariffs that would determine how small value claims should be handled on the website.

A member of the CPRC secretariat, Peter Clough, confirmed on Wednesday that the committee had met in early March despite the coronavirus outbreak, but he did not respond to a question over whether a meeting scheduled for May, where the rules are expected to be presented in full, would go ahead.

The motor bureau has said it should be able to make the August deadline as long as the rules and tariffs were published in May and did not differ too significantly from the draft rules it was given last year.

"The MIB has built the service based on a set of assumptions," a motor bureau spokesperson told Law360. "An August launch was agreed to give the CPRC additional time to complete its work and provided we have their decisions by early May, and these are not too far away from what we've built to date. We are comfortable we will be ready for the revised launch date."

It is not only the legal rules, known as "pre-action protocols," that need to be finalized. The Ministry of Justice needs to consult with the Lord Chief Justice over tariffs that determine how much a claimant should expect to get from their insurer for whiplash injuries, depending on severity.

An area of confusion that remains is over how the new system will treat claimants that also have "nontariff" injuries, like a sprained wrist or cracked ribs, whose secondary injuries may be more severe than the whiplash injury.

After those problems are resolved, the government needs to introduce secondary legislation containing the finalized tariff, the legal definition of whiplash, a ban on pre-medical offers and an increase in the small claims court minimum to £5,000.

The Ministry of Justice also still needs to sign off on a consultation by medical reporting site MedCo that sets out new rules for medical experts dealing directly with unrepresented claims.

Once that is done, MedCo — a system for law firms to get medical reports for personal injury claimants from doctors and medical reporting organizations that faced its own problems upon launching in 2015 — will then have to individually audit all experts that will provide medical reports for unrepresented claimants under the new system.

Industry experts say there also remains confusion over how whiplash injury claims will interact with other associated claims, like those surrounding rehabilitation costs, as well as car repair and credit hire — where a hire car is supplied to a claimant after an accident.

"There are so many outstanding issues to sort out, including how injured people will access mobility if they need it following an accident and how that will be handled both within and outside the [MIB] portal," said Kirsty McKno, chairwoman of the Credit Hire Organization.

The Civil Liability Act also includes changes to the small claims limit for employers' liability and public liability claims, from £1,000 to £2,000.

The Association of British Insurers said in September last year that the Ministry of Justice should prioritize changes to road traffic accident injuries, at the expense of employers' liability and public liability changes.

"I think that the time has come to ask whether this policy remains right, especially in the context of the serious amount of work that needs to be done to deliver the wider [road traffic accident] reforms," said James Dalton, director of general insurance policy at the ABI.

Some of that work includes figuring out how much of a burden the reforms could place on the courts, following the Ministry of Justice's announcement in February that the whiplash portal would not include a system for challenging the rejection of claims by insurers.

The government had originally intended the website to offer a path to alternative dispute resolution, and taking that option off the table drew the ire of claimant groups, who said it would "incentivize insurers to deny liability."

Now, the plan is for disputed claims to be directed to district courts in order to determine liability, according to Nigel Teasdale, DWF's head of motor who attended a March 3 presentation from the MIB on the progress of the portal's development.

That presentation included clarifications from the Ministry of Justice on several areas, disputed claims among them.

"We don't know however how that court process will look," Teasdale wrote in a blog last week. "The MoJ have talked about developing 'bespoke processes' to enable litigants to go to court to establish liability."

Teasdale told Law360 the changes would put additional pressure on antiquated courts already reeling from having to adjust to online hearings in the wake of the COVID-19 crisis.

"We were already considering how the courts would have the ability to cope with the extra demands that the new process will surely bring, against a background of concerning increases in the length of time it takes small claims to reach trial," he said.

Given the amount of training district judges would require, on top of the other areas of regulation that still needed to be introduced, the Ministry of Justice should "prioritize its resources" and put back the August launch date, Teasdale said.

"A further delay would seem inevitable and the MoJ should learn from previous experiences and acknowledge that, sooner rather than later," he added.

A spokesperson for the Ministry of Justice did not respond to a request for comment.

Teasdale said even without the coronavirus outbreak, a revised deadline of October would have probably been appropriate given the amount of work still to do.

Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, said April 2021 would be the safest choice.

Critics of the program have pointed to the troubles that beset the launch of MedCo in 2015.

A low bar for registration meant that highly suspect reporting organizations with no credentials were able to set up on the system soon after it was launched, raising concerns from the industry about the reliability of reports and potential fraud.

Maxwell Scott warned the government that rushing through a half-baked project to meet an "arbitrary deadline" could threaten or delay access to justice for thousands of claimants.

"Our message to ministers is to remove the obsession with imposing a deadline and instead work with us to get the portal working properly in the interests of injured people," he told Law360. "The portal makes sense, but it has to be consumer-friendly."

--Editing by Rebecca Flanagan and Alanna Weissman.

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