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Select committee inquiry

Whiplash Reform and the Official Injury Claim service

Closed

Justice Committee · Opened 10 February 2023 · Closed 30 May 2024

4 recommendations · 5 conclusions
Inquiry on parliament.uk ↗

What the inquiry looked at

“The whiplash reforms, which formed part of the Civil Liability Act 2018, are a package of measures designed to reduce the disproportionately high number and cost of whiplash claims in England and Wales. As part of the reforms the Ministry of Justice commissioned the Motor Insurance Bureau to develop an online portal; Official Injury Claim, for managing low value road traffic accident claims. Official Injury Claim (OIC) is a free and independent service designed to support individuals who have suffered minor injuries arising from an RTA to claim compensation, without the need for legal help. This inquiry examines the effect of these reforms on the number of minor personal injury claims to date. It also looks at how the OIC service is operating and consider whether it ensures access to justice. Read the call for evidence to find out more about the inquiry .”

The committee's words, from the inquiry page on parliament.uk ↗.

What it found

In the committee's words, from the summary of Ninth Report - Whiplash reform and the Official Injury Claim Service ↗

In recent years, the Government has implemented major reforms in respect of personal injury compensation for whiplash with the objective of reducing the number and cost of claims. As part of this, since 2021 an online portal, known as the Official Injury Claim (OIC) service, has been in operation to support individuals who have suffered minor injuries arising from a road traffic accident to claim compensation, without the need for legal help. Despite this, around 90% of portal users are currently legally represented. This interim report calls on the Ministry of Justice (MoJ) and the portal’s operator, the Motor Insurers’ Bureau (MIB), to conduct research to better understand this, and whether steps to improve awareness of the OIC portal and user-confidence in the system would encourage more litigants in person. It also highlights concern that professional users have had difficulties in integrating their systems with the portal, and calls on the MoJ to set out what steps it is taking in conjunction with the MIB to address these concerns.

There is a growing number of unresolved cases in the portal, which now stands at 349,000, and for those cases which do reach settlement, the average time taken to do so is 251 days, and is predicted to increase further. We recommend the MoJ investigates the reasons for the growing number of unresolved cases and the deterioration in the timeliness of reaching settlement, and publishes its findings by the end of the year. The Government had estimated that its reforms would lead to a reduction in motor insurance premiums by approximately £35 per policy. However, it is difficult to determine at this point whether these savings have been realised because of upward cost pressures arising from, for example, cost of living increases and the effects of the pandemic. Accordingly, we recommend that the Government is as transparent as possible in undertaking its statutory assessment of the effects of the reforms on policyholders, including by publication of the submissions made by insurers.

The Committee will return to these issues as well as other aspects of the whiplash reform programme in 2024, once the Supreme Court has given its verdict in the case of Hassam v Rabot which concerns the treatment of mixed injury cases, where whiplash injuries are sustained alongside non-whiplash injuries.

What the government said

The government responded on 29 November 2023. The deadline was 20 November 2023.

Summary written by Accountability Index from the government's response.

The government says the Official Injury Claim service is working well, does not agree that further action is required on the proportion of unrepresented claimants, and agrees that more work is needed on claims flow and on transparency of the motor insurance savings review.

  • On awareness of the portal, it says it "firmly believe[s]" its approach has been correct, including the decision not to fund an awareness campaign, though it will continue to work with MIB on a communications strategy and online search optimisation.
  • On unresolved cases, MoJ "agrees that more work needs to be undertaken" to understand claims flow, and says MIB will publish additional data on dormant claims from January 2024.
  • On motor insurance, it agrees the savings review should be as transparent as possible, but notes that full transparency "may be affected by the need to protect commercially sensitive data".
  • On a follow-up assessment one year after the planned review, it says it does "not disagree with the suggestion" but cautions it is "too early to make such a commitment".

Read the government's response ↗ Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 10 February 2023 to its close on 30 May 2024. The dashed mark is the deadline Parliament records for the government's response.

  1. Report 20 Sep 2023
  2. Government response 29 Nov 2023

What it recommended 4 recommendations · 5 conclusions

1Suspend whiplash reform inquiry pending Supreme Court ruling, noting early concerns regarding OIC service operation.
Concluded (the committee's words)
Given that some of the witnesses the Committee would have intended to call to give oral evidence are parties to the case of Hassam v Rabot to be heard by the Supreme Court in early 2024, and the centrality of the treatment of mixed injury claims in assessing the overall implementation of the whiplash reform programme, the Committee has decided to pause its inquiry until the Supreme Court has ruled on the case. In the interim, we nevertheless wish to raise some concerns in relation to the operation of the OIC service to date, which were highlighted in the written evidence we received, and which we have set out in the remainder of this Report. We have also published the written evidence to the inquiry. We note that these are Parliamentary Proceedings, and that just as we are pausing our inquiry in respect to the Supreme Court, parties to the case should bear in mind that Article IX of the Bill of Rights 1689 applies to the Committee’s proceedings and so not make reference to this evidence in the ongoing case.

Addressed to Ministry of Justice

2Observe OIC portal's low usage by litigants in person due to limited awareness and confidence.
Concluded (the committee's words)
The OIC portal has been designed to support people who have suffered injuries from road traffic accidents to make a claim for compensation without the need for legal help. Initial estimates had suggested 30% of users would not have legal representation, yet this is currently the case for less than 10% of users, and even this figure is disputed by some who suggest it is likely to be lower still. This is largely because of a lack both of awareness around the existence of the OIC and of confidence in navigating a potentially complex system.

Addressed to Ministry of Justice

3Require MoJ and Motor Insurers’ Bureau to research OIC portal awareness and user confidence
Recommended (the committee's words)
Whilst we accept that the majority of OIC users will continue to use legal representation, it is not clear to what extent a lack of awareness of the portal is responsible for the low number of unrepresented claims. Accordingly, we recommend that the MoJ and Motor Insurers’ Bureau conduct research to better understand this, and whether steps to improve awareness of the OIC portal and user-confidence in the system would encourage more litigants in person.

Addressed to Ministry of Justice

4OIC portal continues to experience interface and integration problems for professional users
Concluded (the committee's words)
The OIC portal was designed with unrepresented claimants and users in mind, whereas as we have already noted the vast majority of the portal’s actual users are legal professionals. We are concerned to hear that a number of professional users of the OIC service continue to experience problems with the portal failing to adequately interface and integrate with other systems. We are also concerned to hear about the problems some professional users face when having to copy information between systems, leading to inefficiencies and potential delays in claims being settled and injured people receiving their compensation.

Addressed to Ministry of Justice

5Require MoJ to outline urgent resolution steps for OIC professional user technological problems
Recommended (the committee's words)
We appreciate that it takes time for new systems to ‘bed in’ and we are encouraged that the MIB continues to request and collate feedback from both direct and professional users of the OIC and that it is committed to finding resolutions to problems as they Whiplash reform and the Official njury Claim Service 19 arise. However, it is vital that any technological problems which professional users of the OIC face that affect efficiency, accuracy or timeliness are resolved as a matter of urgency. In its response to this Report, the MoJ should set out what steps it is taking in conjunction with the MIB to address these concerns, and when it expects them to be resolved.

Addressed to Ministry of Justice

6OIC portal faces growing backlog of unresolved cases and increasing settlement times
Concluded (the committee's words)
We are concerned by the growing number of unresolved cases in the OIC portal, which now stands at 349,000. For the minority of cases that have reached a settlement to date, the average time taken to do so is 251 days and is predicted to increase further as more complex cases, which have taken longer to reach conclusion, begin to settle.

Addressed to Ministry of Justice

7Require MoJ to investigate and publish findings on OIC portal unresolved cases and settlement delays
Recommended (the committee's words)
One of the objectives of the OIC portal was to simplify and speed up the process of making a claim for whiplash injuries. Whilst we acknowledge that the nature of the claims process is such that there will always be a stock of cases in the portal at different stages in the claims lifecycle, and that some will take longer to reach a resolution than others, we recommend the MoJ investigates further the reasons for the growing number of unresolved cases and the deterioration in the timeliness of reaching settlement, and publishes its findings by the end of the year. This should include an analysis of all stages of the claims lifecycle, including those aspects which defendants are responsible for progressing, those which claimants are responsible for progressing, and those where improvements to the OIC portal itself could raise performance. It should also include an analysis of timeliness in comparison to how equivalent cases previously progressed in the MoJ’s Claims Portal, and of the apparent disparity in settlement times between represented and unrepresented claims.

Addressed to Ministry of Justice

8Whiplash reforms' impact on motor insurance costs remains difficult to determine
Concluded (the committee's words)
The Government estimated that the whiplash reform programme would remove more than £1.2 billion from the cost of providing motor insurance, and that these savings would be passed on to policyholders through lower premiums. However, whilst the total number of minor personal injury claims has reduced in the last two years, the cost of motor insurance has continued to rise, with insurers citing cost of living pressures, the effects of the pandemic, the war in Ukraine and the increasing cost of care in relation to high value and catastrophic claims. It is, therefore, difficult to determine the extent to which these upward pressures have been offset by any savings arising from the whiplash reform programme.

Addressed to Ministry of Justice

9Ensure transparency for whiplash reform savings assessment and publish insurer submissions
Recommended (the committee's words)
We note the requirement in the Civil Liability Act 2018 for HM Treasury to report to Parliament in the 2024–25 financial year on the extent to which savings have been passed on to policyholders. Whilst we acknowledge that many factors may impact on the cost of motor insurance premiums, it is vital that the direct effect of the whiplash reforms is properly assessed. We recommend that the Government ensures this process is as transparent as possible, including publication of the submissions made by insurers. Given the whiplash reforms are still bedding in, and the large number of cases still awaiting settlement, we further recommend that the Government conduct a follow-up assessment one year after the publication of its planned review.

Addressed to Ministry of Justice