Ministry of Justice reforms, two years on

It’s now two years since the Ministry of Justice (MoJ) changed how we manage low-value Road Traffic Accident (RTA) personal injury claims in England and Wales.

Since its introduction in 2010 the MoJ reforms has continued to encourage early notification of claims, early liability decisions and a fair process to deliver compensation to the claimant as soon as possible, and in the most cost-effective way.

Now the Government is in consultation about raising the RTA claim limit dealt with through the portal from £10,000 to £25,000, which could lead the portal to see a potential 3% rise in claims. This would bring the total volume of RTA claims covered by the reforms to around 90%. Also, there are discussions about the possibility of extending the scope of the process to cover liability claims in addition to RTA claims.

The portal encourages both insurers and claimant representatives to settle claims as quickly as possible through specified time limits – for example, there’s a 15 working-day time limit for investigating liability. ABI analysis has shown that the average lifecycle for a claim kept in the portal is less than half of the lifecycle of similar claims dealt with outside of the portal, so there’s a clear benefit to keeping claims within the new process.

ABI statistics also show that the percentage of claims settled within the calendar year 2010, when the new system was introduced, was up by over 3% from 2009. This represents the largest increase in the decade.

Use of the portal is also having an effect on ATE (After the Event) insurance premiums, which can now be obtained by claimant representatives for less than half the price of premiums covering cases being dealt with through the old process.

While the portal undoubtedly has a positive effect on the lifecycle of a claim, the shortened timescale for reaching a liability decision can still present problems. Which is why it remains vital that claims are notified to Insurers as soon as possible, and with as much information as possible, to enable liability investigations to be concluded within the 15-day time limit.

Ministry of Justice