BIBA’s response to the Future Provision of Medical Reports in Road Traffic Accident related personal injury claims consultation

21st May 2019

Dear Whiplash Reform Team,

Please find below our response to the Future Provision of Medical Reports in Road Traffic Accident related personal injury claims consultation on behalf of the British Insurance Brokers’ Association (BIBA).

About BIBA

The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.

BIBA membership includes just under 2,000 regulated firms, employing more than 100,000 staff.  General insurance brokers contribute 1% of GDP to the UK economy; they arrange 70% of all general insurance with a premium totalling £62.4bn and 87% of all commercial insurance business. Insurance brokers put their customers’ interests first, providing advice, access to suitable insurance protection and risk management.

BIBA receives more than 600,000 enquiries per year to its Find Insurance services, online and via the telephone which are directed to member insurance broking firms.

BIBA is the voice of the sector advising members, the regulators, consumer bodies and other stakeholders on key insurance issues.

Question 1

The Government proposes to extend the scope of MedCo so that all initial medical reports for all RTA related PI claims under the SCT are provided under a single system. Do you agree with this proposal? Please provide any evidence and further information in support of your answer.

During the Bill stage of the Civil Liability Act, BIBA supported the outlawing of pre-medical offers as those people with spurious claims were taking advantage of the lack of economy of investigating claims. The reforms in this Act are an important step to ensuring only those who are genuine claimants are able to access compensation and honest policyholders will benefit from lower premiums as a result.

BIBA therefore agrees with the proposal to extend the scope of MedCo to allow all initial medical reports for PI RTA claims under the SCT are submitted under a single system. This would be the obvious mechanism to use.

Question 2

If you have suggestions for alternative approaches please provide details and, in particular, how they would work in practice.

BIBA do not have any alternative solutions and believe the proposal in Question 1 to be the most obvious and straightforward solution.

Question 3

If MedCo is extended to cover all types of medical reports for RTA related personal injury claims under the SCT, should other types of medical expert be added to those currently available for the purpose of providing medical reports? Please give examples of who should be added along with your reasons.

Insurance fraud has been colloquially described as ‘whack-a-mole’; fraud is reduced in one area when statute and regulation closes loop holes, for it to pop up in another area. Examples include noise-induced hearing loss claims and holiday sickness.

Further, when MedCo was set up, MROs sought to ‘game’ the system by attempting to bypass the system of random allocations in the offer.

Therefore, in order to continue tackling fraud and to ensure that MedCo continues to be fit for purpose, a degree of flexibility in terms of approach is needed. In relation to the question, we believe MedCo should have a degree of flexibility to add medical professionals as it sees fit.

Question 4

If additional specialists are added, should they be restricted to providing initial reports for claims which involve their specialisms or should they be allowed to complete the full accreditation process and be allowed to provide all initial reports? Please give reasons for your answer.

Because of instances where MROs have sought to game the system as described in our answer above, we believe that limiting reports to only where they have speciailisms would reduce the scope for this to be used as a loophole for practitioners not skilled in a particular area to achieve recognised status or for MROs to employ specialists in the hope they can also have these appear in the offer and increase the number of allocations the parent company receives.

Question 5

Do you agree that other types of practitioner (such as osteopaths or chiropractors) be included in the list of experts who can provide medical reports for claims subject to the new RTA SCT limit? If you agree, please describe which types of additional practitioner should be included and why? If you disagree, please gives reasons why.

BIBA agrees that where specialisms are needed in providing medical reports, specialists in those areas should be included in the list of experts who can provide medical reports; however they should only be limited for providing reports which span their area of listed expertise. BIBA agree that a potentially more detailed report covering the area of specialism could be required, if recommended by the initial examiner.

Question 6

Should the current fixed recoverable cost regime for initial soft tissue injury medical reports be extended to cover initial reports for all RTA related PI claims under the SCT?

Please give reasons to support your answer.

Applying the same Fixed Recoverable Cost to all RTA medical reports would bring clarity and certainty to the costs involved, allowing adequate reserving and would provide a consistent approach.

In order to ensure that adequate experts can be found and the value of the FRC is not too low or too high, a review – for example, every three years, could ensure that the cost of producing a medical report continues to be appropriate.

Question 7

Should the fixed recoverable cost regime be extended to all initial reports for claims that fall under the revised SCT in the new IT platform, if additional experts are added to and sourced through MedCo? Please explain your answer.

As described earlier, MROs have sought to game the system for their commercial gain. Therefore, we urge caution in MROs being able to nominate further expert reports from the same company or group of companies as this could be used as a way by unscrupulous operators to increase their revenues through unnecessary medical reports.

Question 8

When extending the current MedCo search system to unrepresented claimants, what, if any, changes should be made to the current MedCo Qualifying Criteria? Please give reasons for your answer.

BIBA believe that the Government are right to ensure a focus on the unrepresented claimants experience, e.g. with simple terminology etc, but to retain the existing basis of the MedCo portal through randomised allocations.

There have been concerns as to the use of so-called McKenzie Friends by some claims management companies as a way to circumvent regulations. There is a possibility that if claimants are allowed to choose their MRO, this could lead to a back-door for organisations to direct claimants who may seem unsupported to choose certain preferential MROs. Further, the process is much easier for claimants to understand, whether supported or not, when there is just one process, rather than several processes depending on circumstances.

Question 9

When extending the current MedCo search system to unrepresented claimants, what changes would you like to see as to how the information returned should be presented (i.e. currently only contact details are returned, but should more information about the provider and their service offering be provided)? Please give reasons for your answer.

If a claimant wants to know more about an MRO, in the interests of transparency, they should be able to request this information. However, in relation to the question above, delivering essential information first and foremost should be the focus of the information return. If the information returned is overly-long and complicated, using technical medical language or acronyms, this is likely to be bewildering for many unsupported claimants when they do not necessarily need to have this information.

Question 10

If you are an MRO or a DME will you be opting in to the new service providing medical reports for unrepresented claimants at £180 (plus VAT) rate? Please give reasons for your answer.

This question is not applicable to BIBA.

Question 11

When extending the current MedCo search to unrepresented claimants, do you think it should include a standardised set of service level agreements? Please give reasons for your answer.

As per our answer to questions 8 and 9, the approach should be as standard and easy to understand as possible. Offering different SLAs adds another layer of complication which is neither needed nor necessary for unsupported claimants. This also provides a standard level of service which is not subject to the lottery of whom a claimant might be allocated in the offer.

Question 12

What other changes do you think would need to be made to the current MedCo system for unrepresented claimants to be able to obtain a medical report? Please give reasons for your answer.

The customer journey should be as smooth and intuitive as possible, therefore BIBA recommends the MOJ holds focus groups with claimants to understand what their needs will be and where guidance may be needed to help steer them through the process. Accessibility is also an important aspect, e.g. can this portal be used on a mobile device.

Question 13

Please provide with supporting evidence the average cost of an initial medical report for non-soft tissue RTA related PI injuries?

BIBA’s members are brokers and generally don’t collect this information.

Question 14

Do you agree with an assumption that around 400,000 claims would be processed through the MedCo portal; and of these, around 10,000 (5%) would be non-soft tissue claims? Please explain your answer, preferably with supporting evidence.

Question 15

Do you agree with the assumptions that around two thirds of claims processed on the MedCo system would be with legal representation (made up of just under 50% of claims with BTE insurance and under 20% with other legal representation) and one third of claims without legal representation? Please explain your answer, preferably with supporting evidence.

We have chosen to answer questions 14 and 15 together.

The rationale provided in the consultation document seems a sensible assumption regarding the above two questions.

If you require any further information or consultation with us or BIBA members, please don’t hesitate to get in touch.

Yours Sincerely,

Andy Thornley
Head of Corporate Affairs,
British Insurance Brokers’ Association (BIBA)
[email protected]