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Briefing on new personal injury claims process

Issue date

July 2013

Introduction

This Government's insurer led agenda transforming the way that personal injury claims are dealt with, along with a raft of other changes amounts to an attack on access to justice on a scale that this country has never seen.

In relation to personal injury the principal attacks relate to:

  • The new Criminal Injuries Compensation Scheme (from 27 November 2012)
  • The 'Jackson' reforms and Part 2 of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO - from 1 April 2013)
  • Extension of the 'portal' process to Employers' Liability (EL) and Public Liability (PL) Claims (from 31 July 2013)
  • Fixed recoverable costs radically lower than existing costs (from 31 July 2013).

The focus of this briefing is the portal and fixed costs.

There also remains a real threat of a declaration that the Small Claims Track Limit (below which no costs are recoverable) might rise to £5,000 for the injury alone (excluding losses) and not - as was the subject of recent consultation - limited to Road Traffic Accidents (RTAs), possibly by the end of the year.

The TUC has consistently and persistently lobbied, with other claimant representatives, against these changes which will undoubtedly reduce the number of legitimate claims and reduce the amount of damages that is recovered in many cases

The current RTA portal process is in its infancy, it has never been properly evaluated. Indeed the only independent research commissioned by the Government cast doubt on its effectiveness and of huge concern raised the fact that damages for claimants have reduced under the scheme, not least because of the impact of the fixed costs regime currently in place. Those costs agreed with insurers at a level to reflect work required, are about to be slashed to less than half at the behest of those insurers.

The TUC opposes fixed costs because of the unfairness this places on claimants when bringing a claim against defendants who are always represented through their insurers with virtually unlimited resources. And we are also very concerned the fixed costs are at such a level that claimants/their representatives will be under real pressure to settle too early risking under-settlement. Other legitimate claims will not proceed at all.

Summary

The Ministry of Justice has only recently publicised details of the new procedure by way of legal protocols and associated forms on their website. See http://www.justice.gov.uk/civil-justice-reforms/personal-injury-claims/extending-the-road-traffic-accident-personal-injury-scheme . These documents are still in draft form and awaiting final sign off from the Civil Procedure Rules Committee and the Rules, including around defendants fixed costs have yet to see the light of day.

The current protocol and portal for RTA cases with a value of between £1000 and £10,000 will be expanded on 31 July to cover all:

  • RTA cases with a value from £1000 up to £25,000 where the accident occurred on or after 31 July 2013
  • EL claims (both accident and disease) and
  • PL claims from £1000 up to the value of £25,000.

The notable exceptions are: (a) employer liability disease claims where there is more than one defendant (this will exclude a large number of disease cases); (b) Mesothelioma claims; (c) clinical negligence claims and (d) PL diseases (see paragraph 4.3 of the protocol).

It will apply to all cases where the accident occurred on or after 31 July 2013 or in the case of EL disease claims, cases where a formal letter of claim has not been sent before 31st July 2013.

The new fixed costs in the attached table will then take effect if the case is settled within the portal. There is also a new fixed costs regime that applies to all cases that fall out of the portal. The tables appear at the end of this briefing. The only thing that might be expected to change is in relation to trial costs for cases outside the portal, which will be increased in line with inflation probably since December 2010. EL disease cases that fall out of the portal - through no fault of the claimant/representative - will not be subject to fixed costs, but hourly rates will apply. The danger in all circumstances is that if a claim falls out of the portal, for example, when insufficient information has been included on the initial from - the Claim Notification Form or CNF - the defendant can seek an order that only portal costs apply.

It is important to note that although generally all RTA, EL and PL cases need to go through the process initially, if no response is received from the insurers within the timescales set out below; or liability is denied; or if any allegations are made by the insurers that the claimant was in some way also at fault (i.e. contributory negligent) the claim will come out of the scheme early on (Stage 1) and fall back into the normal litigation process (albeit after 31 July 2013 this will also be under a fixed costs regime).

We expect that a large number of claims will fall out the process. We know under the current scheme many claims do not proceed beyond this initial stage. The prospect of insurers responding to/admitting liability in complex EL accident and disease cases will be much less likely

All applicable cases need to go through this new claims process by way of an electronic 'claims portal' administered by Claims Portal Ltd. The portal has been in place since 2010 when the scheme began to facilitate the low value RTA process. The TUC is represented within Claims Portal Ltd, by two of the 13 Directors. The portal website - http://www.claimsportal.org.uk/en/ - sets out details about the scheme and what steps need to be taken by claimants' representatives now to prepare for the changes, and includes a training site using with the standard forms that need to be used. If you are interested in more detail you can visit the website. Some unions will register to use the portal, others might like to register to use the training site so individuals can try it out. Otherwise you can click on 'Using the Portal' on the home page, for example, to have a look.

The forms for EL/PL matters are simple in design and largely mirror those that have been in use over the past 3 years in RTA cases. However, the amount of information required by compensators on the CNF in EL and PL cases is likely to be substantially greater. The forms at Stage 2 - proceeding towards settlement if possible after where liability has been admitted at Stage 1 - are substantively the same.

In short the process begins with the claimant's lawyer completing the (CNF) to be sent to the appropriate insurer. There will be many more problems with identifying the defendant/compensator/insurer than in RTA claims.

If liability is accepted, the claim will continue through the portal process. After medical evidence is obtained, the claimant makes the first offer on the Stage 2 Settlement Pack and settlement counter offer awaited. If negotiations prove unsuccessful within the protocol time limits then the case will come out of the portal itself, but the process continues under Stage 3 with a simplified procedure before the courts and costs fixed at £250 for a 'paper hearing' and £500 for an oral hearing.

Next steps

We are concerned there will be an access to justice gap with many claimants not in a position to get representation to bring their claims or if they do proceed with their case that they receive lower compensation. Union members will almost certainly have better protection if they take their claims through their union, as many other lawyers are talking of routinely deducting 25% of a claimants damages (for the injury and past loss), but there is no doubt that Unions will need to adapt considerably to continue to ensure our members who suffer injury at work through no fault of their own receive the justice they deserve.

It will also be important for Unions and their lawyers to keep a record of the impact of this scheme so that Unions have the evidence they need to continue to lobby about these changes and associated costs when matters are reviewed in due course.

'PORTAL' CLAIMS SETTLING FOR UP TO £10,000

Stage 1

Stage 2

TOTAL

Road Traffic Accident Claims

£200

£300

£500

Employer and Public Liability Claims

£300

£600

£900

'PORTAL' CLAIMS SETTLING FOR £10,000 - £25,000

Stage 1

Stage 2

TOTAL

Road Traffic Accident Claims

£200

£600

£800

Employer and Public Liability Claims

£300

£1,300

£1,600

Table of Portal Claims

The table above applies to cases that fall out of the portal and remain within the 'fast track'.

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