The Civil Liability Bill fetched up at the House of Lords for its final appearance in Parliament on 20 November, before proceeding to Royal Assent and becoming the law of the land.
Thanks to all the Brexit brouhaha, most MPs will pay scant attention to the most significant shake-up of the claims sector in recent years, which has been turbo-charged again by government intervention. And there is no sign of a let-up.
The key elements of the reforms, namely the increase in the small claims limit to £5K (from its current £1K) and the introduction of new tariffs, will await further legislation, probably in 2019.
The small claims portal is due to be launched in April 2020 and we await the second part of the government’s consultation into credit hire and rehab; the government is also due to complete its formal review of the effects of LASPO. Elsewhere the FCA is busy consulting on the new regulatory regime for CMCs, which move under its control from the MoJ.
Meanwhile, the insurers face big changes to their pricing models following the launch of an FCA review into dual pricing and a super complaint against them and other sectors from the Citizen’s Advice.
Coping with this blizzard of change is hard enough, but the additional uncertainty caused by Brexit makes it impossible to predict what’s going to happen in the next six months, let alone the next five years.
In the meantime, customers continue to have accidents, and thus continue to require expert help to navigate their way through complex claims processes and ensure they are properly protected in their hour of need.
Increasingly, these customers will be expected to manage their claim without human intervention and rely on technology. Indeed, ministers and officials at the MoJ view technology as a panacea to cost pressures in the civil justice system, pressures which have seen a near 40% real terms cut in budget between 2011-2020. Hence the small claims portal.
So, what next?
Claims companies await with some interest the advent of the portal. No one should doubt that technology can provide slick and efficient claims management. Many companies are themselves investing heavily in technology – both in the front and back office – to do a variety of tasks from printing and dispatch, to online direct interaction with customers making a claim.
Glen Eastwood, MSL’s newly appointed MD states:
“I have joined MSL at a time of significant change in the motor sector.
As with previous reforms in this arena, there will be challenges for all, but also opportunities for those businesses that are innovative and agile.
MSL is working hard to ensure our customers continue to benefit from our passion for excellent customer service and proactive approach to claims handling in the lead up to the reforms and beyond.”
Today, data analytics, machine learning, robotics and algorithms are just as likely to feature in boardroom conversations as customers, balance sheets and regulation. Technology can also give claims companies the wherewithal to move beyond their traditional core competences and offer more propositions.
As fees and charges continue to be squeezed, the inherent efficiencies technology provides will help claims companies continue to make margin (albeit low margin) from low cost claims activities.
And a little of that human touch…
How this revolution leaves the customer is more difficult to predict. Both government and regulators have made clear that customers remain at the heart of their agenda. Indeed, during the Civil Liability Bill debate, the Justice Minister, Rory Stewart MP, committed to ensuring the new claims portal would be customer friendly, and would be thoroughly tested to ensure it really is.
That’s all very well, but research shows that not all customers want to manage their claim online. A large proportion of claimants prefer to deal with a human being. Other claimants may not have access to the internet, or struggle to understand the system and this will present the Government with a real challenge over coming months.