A new dawn for personal injury

Introduction

On 1 April 2013, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into effect, bringing with it the biggest set of reforms to affect the area of personal injury law for more than a decade.

Referral fees are now banned in personal injury cases and a new fixed recoverable costs regime has been introduced to govern Employers Liability (EL) and Public Liability (PL) claims with a value of up to £25,000.

In addition, the Road Traffic Accident (RTA) portal limit is set to be increased from £10,000 to £25,000. The new processes are supported by two Protocols, as well as amendments to the Civil Procedure Rules 1998 and its Practice Directions.

The main changes to the existing Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents

The online RTA portal has been extended horizontally to incorporate claims that are valued at £25,000 or less. The new Protocol will affect accidents that occur on or after 1 April 2013 and will come into effect on 31 July 2013. Stage 1 fixed costs are now payable within 10 days of receipt of the stage 2 settlement pack by the Defendant and the fixed costs payable to Claimant representatives have been reduced from £1,200 to £500 for claims valued up to £10,000. Where a claim is valued between £10,000 to £25,000, fixed costs of £800 will now be recoverable at the end of Stage 2 of the online portal. In the event that the matter proceeds to Stage 3, a further £250 will be payable to the Claimant’s representatives for a paper based hearing and £500 for an oral court hearing. The success fee charged to the Claimant also cannot exceed 25% of the Claimant’s damages, excluding damages for future care and loss.

The Pre-Action Protocol for Low Value Personal Injury Employers Liability and Public Liability Claims

The new EL and PL Protocol will apply to all claims arising from an accident occurring on or after 1 April 2013 and the Protocol will come into force on 31 July 2013. As of 29 May 2013, Claimant representatives can register for access to the new portal at the following website: www.claimsportal.org.uk. The letter of claim has been replaced by the Claims Notification Form (CNF) in Stage 1 of the process and this is completed by the Claimant’s representative on the online portal and then submitted to the Defendant’s Insurer.

A hard copy of the Defendant Notification Form is also sent to the Defendant by first class post but where it transpires that the Claimant has sent the CNF to the wrong Defendant, they may resend the relevant form to the correct Defendant. The Defendant or their Insurer will then have one working day to acknowledge the electronic CNF on the online portal, as opposed to the 21 days currently provided. A decision on liability will have to be provided within 30 working days for EL claims and 40 working days for PL claims, instead of the current 3 months.

In respect of an EL claim, the Defendant must provide earnings details to verify any claim for loss of earnings within 20 days of the date of the admission.

In respect of disease claims, the Defendant or their Insurers will have 30 days from receipt of the CNF where no letter of claim was sent to the Defendant before 1 April 2013. Where there is an admission of liability but contributory negligence is alleged, the claim will automatically fall out of the portal.

Similarly if the Defendant or their Insurers fail to provide a decision on liability within the requisite time frames, the claim will revert back into the standard Pre-Action Protocol. Once an admission in respect of liability has been obtained, the Claimant’s representative will then proceed to obtain a medical report and details of the Claimant’s financial losses so that the claim can be valued. However the medical report must be disclosed within 15 days of the Claimant’s approval of the report or the expert’s prognosis. Witness statements may also be provided where reasonably required to value the claim and a new duty exists to disclose medical records with the medical report, as well as photographs of the Claimant’s injuries, where claims are worth over £10,000.

Any additional medical reports which are required by the Claimant will also need to be justified and a non-medical expert report will be allowed where it is reasonably required to value the claim. Also where the value of a claim exceeds more than £10,000, the Claimant may request more than one interim payment and the Claimant may obtain an advice on quantum from Counsel or a Specialist Solicitor.

Once the claim has been valued by the Claimant’s representative, a Stage 2 Settlement Pack is then submitted online to the Defendant’s Insurers. This contains copies of the medical report(s) and any relevant medical records relied on by the Claimant’s expert in the medical report. Evidence of the Claimant’s losses and disbursements incurred will also be provided to the Insurers, as well as any photographs or witness statements to be relied upon in support of the Claimant’s valuation of quantum. The Defendant’s Insurers then have 15 days in which to consider the Stage 2 Settlement Pack and make a counter-offer, after which both parties have a further 20 days to enter into negotiations to settle the claim. The total consideration period can be extended by consent of both parties. Where a party makes an offer of settlement 5 days or less before the total consideration period is due to expire, a further 5 days is provided for full consideration to be given to the last offer made.

The fixed costs payable under the new Protocol will be £900 for claims valued between £1,000 and £10,000 and £1,600 for claims valued between £10,000 and £25,000 where the claim settles at Stage 2 of the online process. If the matter does not settle at Stage 2, the Claimant will then complete a Court Proceedings Pack and send this to the Defendant to approve. This pack will contain the initial offers made by both parties in Stage 2, copies of medical report(s) relied upon, evidence of special damages and disbursements incurred.

Once the contents of the Court Proceedings Pack are agreed between both parties, the matter proceeds to Stage 3 where a court will decide the amount of compensation due to the Claimant. If the Defendant breaches any of the mandatory timescales stated in the Protocol, the claim will be excluded from continuing under the Protocol and once the claim exits the online portal, it will not be able to re-enter.

Finally all written communications, which are not required by the Protocol, must be sent by e-mail between the parties.

Claims excluded from the new EL/PL Protocol

Whilst the new Protocol has been designed to include the majority of EL/PL claims, there are some notable exceptions, which will automatically be excluded from the online portal. These include claims involving protected parties or where the Claimant or Defendant acts as a personal representative of a deceased person.

Insolvent or uninsured Defendants are also excluded, as well as multi-employer disease claims and multiple Defendant claims.

Clinical negligence claims, child abuse, harm or neglect claims and mesothelioma claims are also excluded.

Problems envisaged with the new EL/PL portal

In order for the online portal to work effectively with EL/PL claims, it is necessary for Claimant’s representatives to be able to identify the relevant insurer and a starting point for EL cases will be the Employers’ Liability Tracing Office. However as there is currently no equivalent of the Motor Insurers Bureau for EL/PL claims, there will always be the issue of uninsured and insolvent Defendants.

In addition, PL insurance is not compulsory in the United Kingdom and therefore it could prove difficult for self-insured Defendants to use the portal process, as they will be unfamiliar with it. However according to the draft Protocols, the responsibility will be on the Claimant to identify the correct Insurer and in the event that the Insurer cannot be identified, the CNF is to be posted directly to the Defendant so that they can acknowledge receipt.

Another problem is that the implementation of tighter timescales to investigate liability will mean that Defendants and their Insurers may not have sufficient time to collate the information necessary to respond with an early decision on liability. Whilst this change could render positive for Claimant representatives, it remains to be seen whether the reduction in time to investigate liability will actually lead to more admissions from Insurers.

There is also a danger that Insurers may start to admit liability on claims simply to avoid the need to pay increased costs if the matter falls out of the online portal. Therefore conduct issues between the parties could become a real concern once the Protocols come into effect. The Protocols also allow for a claim to leave the process due to a lack of information provided but the rules are clear that only portal costs may be awarded in this instance at the conclusion of the claim. This may prevent Claimants’ representatives from submitting incomplete CNFs intentionally in order to force a claim to leave the online process so that they can obtain more costs.

Conclusion

At the time of writing, it is difficult to ascertain whether the extension of the RTA portal and the online portal dealing with EL/PL claims will be a success as the Protocols dealing with the new process will not come into effect until 1 August 2013. However in light of the problems anticipated above, it will be interesting to see how Insurers and Claimant representatives alike deal with the challenge of processing claims through the new online portal.

IBB Solicitors has built a reputation for quality of service in pursuing compensation in cases involving accident, illness or death, including road traffic accidents. If you would like advice on personal injury issues, contact a member of IBB’s Personal Injury team: call us on 08456 381381 or email pi@ibblaw.co.uk.