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Research by international law firm DAC Beachcroft into insurers’ perceptions and experiences of the RTA electronic portal and associated process has revealed broad satisfaction with how the system is now working, with 90% of participants stating that the portal had met or even exceeded their initial expectations. All, however, agreed there was scope for improved outcomes, particularly over the provision of better statistical management information for cases in the portal.
The report, RTA process: Clear road ahead?, published today, is based on detailed interviews carried out by DAC Beachcroft with ten leading UK insurance companies.
Asked whether the portal had achieved its objectives of faster settlement of claims and lower legal costs, 80% of participants said the claims settlement times had reduced, although 20% felt it was too early to say, particularly with regard to longer tail, more complex claims. When it came to costs respondents were more cautious, with 60% saying that legal costs were lower under the process. A number also warned that the costs associated with claims outside the portal were rising, speculating that this trend might be being driven by claimant firms adopting a more aggressive approach to issuing proceedings in such claims, in order to recoup revenues lost since the introduction of the new process.
“The challenge for insurers is to keep as many claims as possible within the portal process,” commented Peter Allchorne, national head of Motor Claims at DAC Beachcroft. “Where claims legitimately fall outside it, insurers should make an early Part 36 offer if appropriate.”
All respondents broadly supported extending the portal and pre-action protocol to cover both higher value RTA and EL/PL claims, although they warned that there would need to be some allowances, for example over deadlines and medical reports allowed by the protocol.
Tom Baker, partner and national head of Casualty at DAC Beachcroft, argues strongly in favour of extension. “The disproportionate nature of claimant costs is as prevalent in EL/PL claims as it was in motor. While PL claims will inevitably pose more of a challenge to defendants and insurers, there are ways and means of shaping the process. Frankly, there can be no justification for excluding simple ‘slippers and trippers’ from a wholesale review of pre-action procedure.”
Some 60% of participants acknowledged they were taking steps in anticipation of the process being extended.
The lack of statistical management information from the portal was a disappointment but, as Peter Allchorne pointed out, only by investing in a bolt-on system or A2A software, which enables access to the portal, will insurers realise the full benefit of the process. Many participants had chosen not to invest in the A2A software at the start on the grounds of cost and initial uncertainty as to the practical operation of the portal, although none had closed the door on using it in the future.
“With improved management information, insurers can formulate targeted strategies to reduce their indemnity spend and meet the challenges of increasingly savvy and technologically sophisticated claimant solicitors. Those insurers that can link their claims management systems to the portal will have a proven competitive advantage,” Allchorne noted.
Most respondents agreed that the portal had generally improved working relationships between claimant solicitors and insurers, with 70% seeing greater levels of cooperation. Almost all participants (80%) had experienced some uncooperative behaviour by claimant solicitors, such as refusing to communicate outside the portal, but this was only in a minority of cases.
Initial concerns that the portal would increase the industry’s exposure to fraud remain. Some 70% said that they were detecting more fraudulent claims, although some felt the portal was also helping to detect fraud earlier. Only 50% of participants in the survey had altered their fraud strategy as a result of the RTA process.
“The portal has demonstrated its potential to settle mainstream personal injury claims in a timely and cost-effective way,” Allchorne concluded.