Abusing the purpose of the Rehabilitation Code
The Rehabilitation Code has been part of the personal injury landscape since 2007 when the first Code was introduced, with the most recent overhaul in 2015.
The underlying ethos of the Code is recognition that early rehabilitation maximises the chances of a fuller recovery for the injured party. This is of benefit to both parties. For the injured party, it means a better chance of returning to their position as it was before the accident, or as near to it as is possible, depending on the severity of the injury. For the insurer, early rehabilitation can have a positive financial impact, such as a reduced loss of earnings claim for an injured party who with early support is able to return to work sooner.
The 2015 review of the Rehabilitation Code recognises that often rehabilitation is required in cases where issues in relation to liability may not be resolved. Whilst acknowledging that parties will only engage in the rehabilitation code on a consensual basis, the code expressly notes that it can still be applied where there is no agreement on liability (paragraph 1.3). Indeed, increasingly with pressures on police resources, it can be many months before any independent evidence becomes available enabling liability issues to be clarified and refined. However, during that time, particularly for many of my clients who have very severe injuries, there is a real and urgent need for rehabilitation.
Increasingly this is where the problem lies. Not all insurers are subject to this criticism. Some insurers and it seems those with experience of serious injury claims and are able to take a pragmatic view on liability, absent any evidence, are willing to engage in the Rehabilitation Code. Engagement in these terms means not just agreeing to an Immediate Needs Assessment and report, but the funding of recommended early interventions and rehabilitation, notwithstanding that the liability evidence may not yet be available or clear.
Sadly, however, to the detriment of seriously injured people in urgent need of rehabilitation and support, some insurers take a short-sighted, non-collaborative view. It is difficult to know why they do so. It is possibly a combination of inexperience and company policy. If taken at face value, it could be suggested that some insurers are simply offering early engagement with the Rehabilitation Code as part of a fact-finding mission to obtain more detail about the injured party, either to set better reserves or, worse, make early offers to settle.
What I am increasingly seeing happen is insurers confirming early participation in the Rehabilitation Code but withdrawing as soon as they see the recommendations made. As a solicitor representing seriously injured people, I am required at the earliest possible stage to consider whether a client has a rehabilitation need and if I consider that is the case, to invite the third-party insurers to engage with the Rehabilitation Code to at the earliest opportunity. This invitation is often within the letter of claim, even where liability may not be clear.
Most insurers agree by return of email to an INA on a joint instruction under the Rehabilitation Code, requesting case manager details for agreement. A case manager is approved and joint instructions sent which expressly advise the case manager that instruction comes under the Rehabilitation Code. There is little at that stage to suggest that the insurer is not in fact willing to fully engage in the Rehabilitation Code. Increasingly however, whilst nothing has changed in terms of liability investigations, some claims handlers when receiving through the INA, refuse to fund any recommendations citing “ongoing liability investigations” as the reason. This is becoming an increasing problem and, in my view, an abuse of the code.
Such insurers rarely offer any legitimate justification for not accepting the recommendations in the INA. Nor do they put forward any alternative rehabilitation proposals as suggested in paragraph 9.2 of the code. They simply refuse to fund any rehabilitation, so that the injured party will need to rely upon family, friends and/or statutory provision. When challenged, these insurers will simply refuse to respond or will say that the code is voluntary and they do not need to remain within it.
That may be so, but if the reality is that an insurer has no plans to fund rehabilitation, they ought not to be agreeing to an INA in the first place. I appreciate that in some cases, further evidence on liability may become available which justifies departure from the code, but such cases are few and my criticism and frustration is not aimed at the insurers in such cases. My criticism is also not aimed at those insurers who take a pragmatic view. My experience is with insurers who have taken a pragmatic view, even where liability is not clear, is that the outcome for both insurer and the injured party has been optimised. In such cases, litigation can often be avoided. as there is a collaborative approach from an early stage, with the parties communicating and sharing an understanding of the issues.
However, my concern is the increase in insurers who simply refuse funding without justification or who offer only minimal rehabilitation, rather than that recommended by the jointly instructed specialist. This simply caused injured people to feel let down again. I fully accept an insurer cannot be expected to fund support in a claim where liability is not likely to be made out, but if an insurer takes the view that they have a strong defence, they should be informing the injured party at the outset so expectations can be managed. The Rehabilitation Code is clear. Insurers should be assessing the likelihood of a funding of liability immediately upon receipt of the claim. If an insurer agrees to an INA, a claimant is entitled to conclude they have considered their responsibility under the code and will continue to engage in the code, beyond just the INA. Sadly however, some insurers either through a lack of experience or higher level policy decisions are abusing the code and undermining its value.