Alternative dispute resolution (ADR) is the future for minor personal injury claims where settlement cannot be reached directly with the insurer, a leading firm has claimed.
Minster Law ran a pilot in March and April with a ‘tier one’ insurer that settled 39 claims in an average of 2.5 working days, with the quickest settled in a day.
By contrast, cases are currently taking a year to go through the small claims court, rising to 74 weeks for fast- and multi-track claims.
The Official Injury Claim portal – which goes live on Monday – was originally meant to have an ADR function but the government dropped it last year, saying “no practicable solution which gave sufficient coverage of ADR for claims” could be found.
All but one of the claims settled for more than the insurer’s final offer. The highest award was for £5,167, the lowest for £2,100.
Shirley Woolham, chief executive of Minster Law, said “frictional costs and charges are no longer acceptable in the 2020s, with ADR and other technology at our disposal. ADR has the capability to become the standard means of settling volume claims”.
The pilot “underscored” the benefits of closer cooperation with insurers, she added, offering to share our results with the Ministry of Justice.
“The Master of the Rolls, Sir Geoffrey Vos, has indicated his support for ADR in civil justice. We believe there is a compelling argument to accelerate its adoption for personal injury for cases up to £25,000.”
Minster worked on the pilot with Nuvalaw, an “inter party resolution platform”. Its chief executive, Willie Pienaar, said the critical proof points from the study were ease of implementation, ease of use, and the quality of awards.
“The technology is in place and with only two touches per claim, our solution has now proved itself to be a higher quality, more controllable and consistent alternative to a traditionally lengthy and expensive court process.
“The outcome is binding and the customer has to agree to that up front, and we have been really pleased with the feedback to date.”
Meanwhile, a separate ADR pilot scheme for minor injury claims that do not settle at stage 2 of the current MoJ portal has achieved average settlement times of 6.7 days and an average £550 reduction in claims costs for insurers because they do not have to cover the claimant’s advocacy costs for the stage 3 hearing.
Dispute resolution platform Claimspace is running the pilot in conjunction with data analytics and risk management company Verisk, taking over 100 cases through to settlement, with three participating law firms, including Slater & Gordon, and two insurers.
Stewart McCulloch, managing director of Claimspace, said the awards were in line with average stage three awards under the MoJ Portal, and other law firms and insurers were in the process of signing up to the pilot.
Matt Jarvis, managing director of personal injury at Slater & Gordon, said: “This ADR pilot shows how the legal and insurances sectors can work together to help people get justice.
“We’re focused on delivering the best possible process and outcome for customers, and that means looking for new ways of resolving problems.”