It is safe to say that all areas of business have been impacted by the COVID-19 pandemic which has brought some sectors to a standstill. We, therefore, thought it would be interesting to publish some of the recent news from the personal injury claims sector which highlights topical matters and developments in the industry. Even though the personal injury claims market has continued to function to a certain extent there have been numerous changes.
Insurers vow to keep personal injury claims market moving
At this moment in time, it is difficult to say with any real certainty when the personal injury claims market will “return to normal”. Social distancing, expectations of a second wave of COVID-19, and legitimate concerns amongst employers and employees will all need to be taken into account. Therefore, it was interesting to see a joint announcement from the Association of Consumer Support Organisations and the Association of British Insurers supported by insurance giants such as Admiral, Allianz, DLG, Hastings, NFU Mutual and RSA.
The announcement confirmed a further extension to measures brought in to try and keep the industry moving in these troubled times. These measures include: –
- Use of remote medical examination/rehabilitation services
- Extension of the traditional negotiating period
- Use of established escalation points
- Consideration of joint settlement meetings
- Use of independent barristers to arbitrate a settlement
It is safe to say that these measures have been well received by all parties associated with the personal injury claims market. The idea is simple, to try and control, and where possible reduce, an ever-extending backlog of personal injury claims. While unclear, it will be interesting to see whether the historic hard lines of both parties will be softened in order to find some kind of middle ground and save valuable court time going forward.
The impact of huge delays in processing and settling personal injury claims include: –
- Cash flow issues for victims
- Reduced standard of living in the short-term
- Potential mental health issues
- Aggravated physical impact of injuries
- Possibility of abandoning perfectly valid claims
While the ongoing impact of COVID-19 is obviously nothing to do with the industry itself, it is interesting to see participants are willing to be flexible and enter more detailed pre-trial negotiations. It is highly likely we will see the emergence of more interim payments as some of the more complicated claims could go on for many months. Whether these changes will be used when the industry “returns to normal” remains to be seen but there is certainly a degree of goodwill on all sides.
Insurance giant lays down fraud marker
In recent years we have seen instances of insurance companies prosecuting those making fraudulent personal injury claims. If the recent announcement by Allianz is a sign of things to come then we could see a significant ramping up of the prosecution of fraudulent claims.
A recent prosecution involved an individual who reportedly submitted a £4000 personal injury claim as well as a traditional claim for vehicle damage and car hire costs following a collision with a builder’s forklift truck. It would appear that the injury claim had solid foundations when a builder’s forklift truck reversed into the vehicle. However, after an initial claim was made the story began to unravel!
Apparently, a claim was made to the individual’s insurance company which was perfectly valid and straightforward. The forklift truck had in fact reversed into his vehicle; there was damage and additional cost to take into account. Later, Allianz was able to obtain a recording of the initial phone call where the “victim” confirmed that he was not in the vehicle at the time. This was also backed up by relevant paperwork which was at no time disputed by the claimant. Indeed, it turned out that two witnesses stated the individual was in fact in the yard shop at the time of the incident and not in the vehicle.
It appears the claimant was approached by a claims company “encouraging” him to make a claim. As a consequence, he made an additional claim for personal injuries received during the incident despite the fact that evidence showed he was not in the vehicle at the time. Suggestions that he had made numerous visits to his GP were contradicted by his medical records and very quickly the personal injury claim began to unravel. At this point, the individual discontinued his claim but after initially looking to pay out on the “injuries received” Allianz decided to take this further.
In what many see as a wake-up call to others even considering fraudulent activity in the personal injury claims market, the individual in question was sentenced to 12 months imprisonment. Allianz was awarded full costs for the prosecution which were provided from central funds. In many ways, this perfectly illustrates the growing focus on fraudulent claims and the huge investment insurance companies have made in recent times to uncover such activity. Will this be enough to put off potential fraudulent claimants in the future?
Developments on potential COVID-19 claims
As the worldwide death toll caused by COVID-19 continues to grow, many in the personal injury claims market are now turning their attention to the potential number of COVID-19 injury and death claims. There have been various developments of late which would indicate that injuries/medical conditions brought on by exposure to COVID-19 could result in significant compensation payments from employers.
- Chief Coroner’s advice
The Chief Coroner (as reported by HR News) recently issued guidance to all coroners, suggesting they need to be aware that death from COVID-19 could actually be the result of human act/omission as opposed to “natural causes”. Indeed the UK government’s decision to make bereavement payments to some elements of the public sector workforce, killed as a consequence of COVID-19, would seem to back up the potential for civil claims.
- Industrial Injuries Advisory Council
The Industrial Injuries Advisory Council has already advised the UK government to add COVID-19 to secondary legislation which would allow claims for injury/death as a consequence of the virus. It would appear that those involved in health, care, and related occupations may well be able to pursue compensation although this could be extended to the wider workforce in due course. So, what are the potential consequences for employers?
- Employer statutory responsibilities
We know that employers have a statutory duty of care with regard to the health and well-being of their employees. This extends to all areas of business which could potentially include exposure to COVID-19 in the workplace and when employers are going about their regular off-site duties. Despite the fact that this highly contagious virus has proven extremely difficult to not only monitor but control, the insurance industry is already preparing for potentially huge claims. For example, if an individual was to contract COVID-19 in the workplace, they may have a claim; then there is the potential to pass this on to family and friends who may also have a potential claim. Where does this all end?
There would also appear to be a potential conflict between the UK government’s advice to “return to work if safe” and pressure placed on employees to return to potentially dangerous environments. We then have the issue of individuals who are shielding and the potential to contract the virus from their extended family. Even though the official advice seems to be that employees have the option to return to work, many may soon be struggling with cash flow problems as and when the furlough scheme is brought to a close. There are so many unknowns at the moment it is very difficult to know what could happen going forward. Watch this space…..
41% of the population don’t know how to pursue a personal injury claim
A recent survey focusing on the personal injury claims market has revealed a high level of misunderstanding and lack of knowledge regarding injuries and valid claims. The survey highlighted the fact that:-
- 19% of respondents would not even consider making a claim even after experiencing serious injury through no fault of their own
- 41% of those questioned admitted they would not know where to start when attempting to make a claim
- 33% would be reluctant to start claim proceedings as they believed it may impact them financially
- This figure increased to 43% amongst those aged 65 and over, with an even more widespread belief they would be impacted financially by making a claim
When you bear in mind the level of advertising undertaken by the personal injury claims market in recent years, not to mention the huge growth in claims, the results of this survey are very surprising. In a further development, the survey showed that the most common reasons for not pursuing an injury claim included:-
- A reluctance to take money from local businesses/authorities (19%)
- Not wanting to burden loved ones (17%)
- The stigma of judgement amongst friends and family (3%)
Again, those aged over 65 who replied to the survey showed increased concern for the burden on loved ones, making them reluctant to make a claim (28%). It will come as no surprise to learn that the more common injuries experienced were as follows:-
- Slips, trips and falls (52%)
- Road traffic accident (32%)
- Sports -related injuries (30%)
- Accidents in the workplace (28%).
The survey offered a very interesting insight into the way in which the public perceives the personal injury claims market and their specific concerns. When you consider the number of valid claims which may not be pursued as a consequence of misinformation, not only are these individuals missing out on compensation but the natural knock-on effect to increased safety in the workplace is being impacted.
Conclusion
While there is no doubt that the UK personal injury claim market has grown over recent years, there is still uncertainty and misinformation amongst the general public. We have the natural uncertainty regarding COVID-19, and potential claims, an expected increase in fraudulent activity not to mention potentially millions of perfectly valid personal injury claims not being pursued. It is fairly evident that once the sector “returns to normal” there will be some very important decisions to be made and a serious backlog of claims to be processed.
