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Motor Injury Claims Collapse – A Double Whammy of Covid and the OIC Portal?

The number of people who have made compensation claims for injuries arising from a motor accident has dropped significantly in the last few years.

The Compensation Recovery Unit (CRU) has reported that there was a 25% drop in recorded motor claims from 2019 to 2020 and this decreased by a further 20% from 2020 to 2021. However, the decrease in claims is even more stark when the figures pre-pandemic and pre-portal are compared: the number of motor claims recorded with the CRU in 2019 was 653,983 but in 2021 it was 398,051: a drop of 40% over the 2 years.

For those who needed to travel during the first lockdown in March 2020, it was clear as to why claims decreased for a period: there was hardly anyone on the roads to be involved in accidents (although some still managed it). The initial lockdown only lasted a couple of months but the change in people’s lifestyles as a result of Covid continued and, to some degree, still continues. Working from home was initially enforced than recommended, and now both businesses and individuals are realising the benefits of the same. For businesses, there is the benefit of being able to downsize their premises and reduce expensive utility bills. For individuals, there is the benefit of no more commuting and being more available for family and friends. In addition to this, after the initial lockdown and the legislation governing social gatherings, it is likely that people became warier of social interaction in order to limit their exposure to Covid, and therefore, there has been, and continues to be, less travel to visit friends or too large social events. As such, the pandemic has arguably changed the lifestyle and working practices of many and the consequence of such is that there were, and most likely are, fewer people on the roads to have accidents than before.

However, was the implementation of the Official Injury Claim portal (OIC portal) in May 2021, a year in which vaccines were being rolled out and a large number of people were actually returning to the workplace and beginning to socialise as before, a contributing factor to the continued decline in motor claims?

On a very base level, the OIC portal was implemented as a result of a change in legislation that dictated that low-level injuries arising from a road traffic accident have to be submitted on the portal where a sliding scale of compensation is awarded (depending on the duration of injury). The costs of making such a claim are extremely limited (often only awarded for the cost of a medical report). The OIC portal is designed to be user-friendly for a litigant in person, although submission of a claim by a solicitor or claims management company is allowed. The basic idea of the legislation and the OIC portal is to reduce the cost of bringing a claim for a “whiplash” injury previously incurred in the instruction of a solicitor and the resultant litigation costs and the savings made by the insurers in this regard can ultimately be passed on to the public by way of a reduction in insurance premiums.

The Motor Insurers Bureau (MIB), which runs the OIC portal, has reported that, from the first two quarters of data (31 May 2021 to 30 November 2021), of the 114,077 claims submitted, less than 10% of these were brought by litigants in person. This is considerably less than the (unofficially) predicted 30% submissions by individuals. This may be indicative of there being a large number of claims not being pursued by those individuals who do not know about, or understand how to use, the OIC portal and, therefore, have not bothered pursuing their claims. However, it is more likely the case that people are still pursuing their claims through the traditional route via a claims management company or solicitor not knowing that they can actually pursue the claim themselves.

Has there therefore been a drop in claims submitted as a result of the OIC portal? The Claims Portal publishes data in respect of motor claims submitted by claim notification form (CNF). The number of CNFs submitted between October 2020 and May 2021 (8 months) was an average of 37,098 per month with a total of 296,781 claims submitted during this period. Between June 2021 and January 2022 (following the implementation of the OIC portal), the number of claims submitted by CNF  was an average of 11,451 with a total number of 91,606 claims being submitted in this period.

Returning to the figures published by the MIB, a total of 114,077 motor claims were submitted on the OIC portal in the first 6 months (between June 2021 and November 2021). The total number of claims submitted by CNF in the first 8 months of the implementation of the OIC portal was 91,606. Obviously, the OIC portal data is only for 6 months and the Claims portal data is for 8 months but, taking into account that the number of claims submitted on the OIC portal in November 2021 was 24,650, the data can be extrapolated to show that the combined number of claims submitted via the OIC portal and by CNF for the first 8 months following the implementation of the OIC portal was at least 254,000. This is not far from the 296,781 claims submitted by CNF in the preceding 8 months before the implementation of the OIC portal. As such, there has been a minimal drop, if any, in the total claims submitted across both mediums.

In light of the above, it is likely that the OIC portal has not caused any significant drop in claims since its inception and the likely culprit for the overall drop in the number of motor claims is the pandemic and its lasting consequences.

Will there be a further drop in claims? Probably not as long as we do not have another national lockdown. Statistics published by the Department of Transport show that, in 2020, car traffic decreased by nearly 25% from 2019 levels (the lowest annual estimate of car traffic in the previous 29 years) which accounts for the very sudden drop in claims during 2020. A summary of statistics for 2021 has yet to be published by the Department for Transport, however, the raw data for 2021 shows that whilst the car traffic did not reach the same usage of the equivalent day in the first week of February 2020 (i.e. pre-pandemic) it remained at a steady average of 15% less than this comparative week.

In other words, the lasting effects of the pandemic on car traffic (more people working from home, etc) appears to have reached a steady plateau in 2021. Whilst this is less car traffic than pre-pandemic, it does not appear to be dropping any further.

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