Time to collect settlement data for personal injury cases?

Richard Zorza’s an excellent and prolific blogger on access to justice in the US. He has highlighted an issue around settlement mills in personal injury cases. We’d call them factories. He’s drawing on a paper by Nora Engstrom. Interestingly, there is much more of a debate in the US about settlement information than there is in the UK. With life and sport the Americans ;like their quants. Europeans disdain such an approach as crude positivism but it is an issue worth considering.

The Compensation Recovery Unit collects some very basic information which is often used to monitor PI claims and it would be a relatively minor step to require lodging of settlement information on top of that (benefit clawback means the system must engage with this issue up to a point – an extension might be relatively straight forward). I imagine a little red mist descending on any claimant lawyer or claims handler at the cost, but there could be some real policy benefits.

It would also enable us to monitor some of the very basic questions about the tort system. In particular, for me, the data on personal injury claims suggests a general diminution in the bringing of more serious claims and a significant increase in minor road traffic claims. There are good reasons to worry about both trends, but particularly a diminution in more serious claims (unless this can be linked to a diminution in serious injuries). The lack of such data is particularly worrying if one considers the debate about the Jackson reforms. How will we know its impact if we don’t know much about the outcomes of cases? Data on outcomes of cases might also have been a significant assistance on the referral fee debate.

Outcome data of this sort needs handling with care when evaluating outcomes, but at the macro level it would provide a useful tool to compare (say) claims managers, ABSs, traditional solicitors firms and claimant capture vehicles. At the moment much of the debate about quality and efficiency in the personal injury system takes place around issues of choice, unevidenced claims about quality with the much harder set of figures around costs (still rather imperfect) being used as the biggest stick to beat the claimant sector. Knowledge about outcomes to compare against costs is crucial to understanding the efficiency of different systems. Yet as ever with legal services policy we have half the story and a whole bunch of arguments. Sensible regulation might require its collection.

2 thoughts on “Time to collect settlement data for personal injury cases?

  1. Richard
    Data collection is certainly key to having an informed debate on the issues you have highlighted. It will assist in evaluating the positions adopted by the various interest groups who advance persuasive arguments in support of or to advance their respective positions. Certainly in relation to the personal injury debate there is a genuine public interest issue as much of the litigation/claims will relate to compulsory insurance covers i.e. motor and employers liability, Therefore if one is to evaluate the efficacy of the arguments on issues such as the principle costs drivers then an objective analysis is required as opposed to the subjective arguments advanced by the various protaganists. At the minute data is avaiable from a variety of sources to incude CRU, Court Service etc. however this is collated to meet the limited needs of those organisations. I would concur that improved data capture should be promoted having first established the reasons behind the capture and the desired outcomes. Insurers already (as far as I can recall) utilise the CRU database as a fraud register. As a consequence there is a precedent for developing basic centralised data to serve the needs of interested parties, in this case the insurance industry. Ideally if total cost is a primary consideration in relation to personal injury for example it would be important to capture damages, defence costs, third party costs etc.
    Reliable data could assist where appropriate in interested parties developing accurate pricing models and in turn those interested parties may bring solutions to the various access to justice, cost of personal injury claims issues.

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