Keoghs Insight


Damian Ward

Damian Ward


T:01204 677087

Late Claims

Fraud Aware Issue 4

The post-LASPO personal injury market has seen huge changes. This was meant to herald a new era of cost reductions, making the pursuit of RTA claims unattractive. However, many predicted that taking cost out of the process (and thus profit) would have the opposite effect to that intended, and those predictions have indeed come true.

The new claimant models need more, not less, volume of claims to survive and so perhaps it is not such a surprise that once the low hanging fruit of regular, new referrals is picked, that fruit further up the tree (and further back in time) is being eyed.

This can be seen in the return of RTA personal injury claims to pre-LASPO levels; but another trend is the considerable efforts that some claimant solicitors are going to in order to process (and often resurrect) cases from accidents that occurred two or three years ago.

We are seeing a substantial increase in the number of late notified claims being presented to insurers. Such claims are usually regarded as cases in which a claim for personal injury is pursued nine months or more after the date of loss, however this is very much a sliding scale. Some see a late claim as one which is pursued after six months; others two years. The key question is this: If there was an onset of symptoms shortly after the accident, and a claim for repairs and so forth was made, why no mention of injury? Why was a claim not pursued at that point?

The QOCS protection offered to a claimant and the ready market of ‘no win no fee’ legal advisors means that there is little, if any, disincentive not to pursue such claims aggressively.

In addition, a case which has been farmed (or in many cases, information about an accident obtained) represents an investment for the solicitor who ‘owns’ it and regardless of whether the claimant is actively pursuing the case, there is a real financial incentive for the solicitor to convert the ‘case’ to cash.

So whilst there may be (and frequently are) legitimate reasons for a claimant’s delay in bringing a claim for personal injury, most genuine claimants pursue their claim shortly after the accident, together with associated losses such as insurance excess and repairs. Why would a claimant who genuinely suffered injury simply not bother pursuing it immediately?

There are two alternatives: Firstly the claimant was injured but pursuing a claim at that time was too much hassle. An adult claimant currently still has three years to pursue their injury claim, and they may simply choose, or are reminded, to pursue it down the track. Secondly there was no injury but a cold call or text from someone advising that ‘£3,000 has been set aside’ for their injury represents too much of a temptation. So they go along with it.

This phenomenon means that insurers and compensators must be alive to these cases and have in mind two key issues when reviewing such claims:

  • Has the claimant instructed solicitors to pursue a claim or are the solicitors acting without instructions, hoping to secure a ‘pre-med’ offer; or
  • If the claimant is providing firm instructions, can the claimant prove on the balance of probabilities that they sustained an injury?

The prevalence of cold calls and text messages and the huge trade in claims data, combined with heavy TV and radio advertising, means that everyone is aware of how to pursue a claim, but often, it is the claim that pursues them. Frequently, a claimant will be contacted about a sum of money which has been set aside for them and is waiting to be claimed. Of course, a positive response by a would-be claimant is not the same as confirming an intention to actively pursue a claim for personal injury to trial.

Also, individuals who have responded positively to a cold call or a text will frequently get cold feet when they realise that, in fact, this might not be easy money after all. Some claimants will get cold feet through pressure in the litigation process; others will fall away even before a CNF is submitted.

Tackling late notified claims (LNC)

By the very nature of a LNC, a claimant will not have actively pursued the claim themselves and like their solicitors, will be anticipating an early offer of settlement. However, when an unmotivated claimant realises that the process is not as easy as it first sounded, they are more likely to abandon their claim, especially when the promised money seems illusory. A lengthy claim process and rigorous cross examination will not have been part of the ‘sell’ to the claimant and, faced with such obstacles, a claim is far more likely to be withdrawn. This process means that such claims have a much longer lifecycle and involve extra work for the claimants’ solicitor, therefore having a detrimental impact of profitability within the new fixed recoverable costs regime.

By focusing on the evidence of each claim, it is possible to build up a backdrop against which the claimant will find it increasingly difficult to satisfy the court on the balance of probabilities that an injury was sustained. Whilst a claimant may seek to impress the court with their oral evidence, this needs to be tested against the objective documentary evidence available and will often be the key starting point in determining the issues. The comments of LJ Moore-Brick in Goodman v Faber Prest Steel 2013 EWCA Civ 153 provides strong authority for such a proposition:

“ is generally acknowledged that it is difficult even for experienced judges to decide by reference to the witness's demeanour whether his evidence is reliable. Memory often plays tricks and even a confident witness who honestly believes in the accuracy of his recollection may be mistaken. That is why in such cases the court looks to other evidence to see to what extent it supports or undermines what the witness says and for that purpose contemporary documents often provide a valuable guide to the truth.”

In determining the claimant’s ability to prove their injury claims, it is the paper trail which is of importance, although other questions such as the extent of prognosis (the more extensive the injury the harder it is to explain the delay), consistency and credibility also remain important factors.

Why go to this effort? Well, there is a crucial long-term benefit. By robustly applying a tried and tested LNC strategy, claimant solicitor behaviours will be altered and the appetite for pursuing a claim without a claimant on board will be considerably reduced. And so in time, whilst we are unlikely to see wholesale changes in the way cases are farmed, we may curb some of the more errant behaviours and abuses in play at present.