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Psychological Injury - Claims Inflation

Posted 05 January 2015 by Donna Scully

Almost every claimant injured in a road accident suffers some sort of orthopaedic injury. Some suffer from psychological symptoms too.

Claimant representatives and insurers agree that psychological injuries can be debilitating, and in many cases will have a more profound impact than the physical injury. Psychological injuries, like any other, benefit from earlier intervention and treatment. The sooner the problem is identified, the less likely that symptoms will become chronic. Early intervention for genuine claimants should be encouraged to ensure that the claimant recovers, and to assist the insurer in securing the best outcome.

At the same time insurers have concerns that some organisations are using psychological claims as a means of generating income, rather than providing treatment and evidence required by the claimant. I have anecdotally heard that they have seen a 50% hike in claims for psychological treatment post LASPO from certain companies.

No reputable law firm would ever encourage treatment for psychological injury, or obtain a medical report from a psychologist or psychiatrist, unless it was both required and in the claimant’s best interests. We should be careful however to guard against the activity of unscrupulous organisations that seek to exploit psychological injury claims in order to profit from unnecessary report and treatment fees.

The ABI have said they are concerned specifically that solicitors are using psychological injury claims to recover some of the costs income lost over the last 12 months. I understand evidence of this has been passed to the Transport Select Committee (TSC) and they will report on the matter shortly.

Any solicitor that receives a commission from a medical agency in respect of an injury referral is in breach of the referral fee ban under LASPO, and the SRA should take action immediately. The MOJ are looking at the “ownership” of medical agencies and whether the agency should do “their own” personal injury work” as they believe there is scope for conflict and abuse if they do So the questions the MOJ are looking at is where a solicitor/ABS has a financial interest in medical or rehab provider, is there a conflict of interest and should this be stopped? The MOJ have no problem with the medical provider doing “other work” just not that which they have a financial interest in. The MOJ recently consulted on this point and others and we await their findings.

The introduction of independent medical panels and accreditation etc. is likely to help ensure that lawyers can no longer benefit financially from relationships with medical agencies.

The ABI accepts that the abuse of psychological injury claims is limited to a small (but significant) number of providers, and we should remember that the vast majority of claimant representatives are reputable, and the vast majority of claimants are genuine. They have provided details of the “abuse” their members are experiencing so let’s hope the TSC are effective in stamping out this bad practise ASAP. We have seen a lot of reform in our market and the last thing we want is to see people abusing that reform and trying to find loopholes to make more money which is not in the client’s best interests.

Insurers, medical agencies and reputable law firms should work together to ensure that genuine claimants receive the treatment and compensation that they deserve, and that any unscrupulous behaviour is identified and stamped out.

© 2018 Carpenters. All rights reserved.
Directors: John Carpenter, Donna Scully

Carpenters is authorised and regulated by the Solicitors Regulation Authority under number 625845 www.sra.org.uk
and is authorised and regulated by the Financial Conduct Authority under number 755996 www.fca.org.uk

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