Changes to handling of personal injury claims
As a result of the Lord Justice Jackson Review on civil litigation and the Ministry of Justice (MoJ) consultation on the civil justice procedure, we have summarised the reforms and how they affect the handling of low value personal injury claims from April 2013. The Jackson reforms are in relation to the personal injuries legal framework focusing on the costs of civil justice in England and Wales as costs were often not relative to the issues.
As a result of this the civil litigation system will then benefit from:
•More proportionate lawyers costs.
•Assist in eradicating a compensation culture.
•Enable insurers to pass on savings to Policyholders through lower premiums.
•These current reforms which apply to the RTA are now intended to be extended to include Employers’ Liability (EL) and Public Liability (PL) personal injury claims as from August 2013.
•The government introduced an online portal system requiring Solicitors to report all Road Traffic Accident (RTA) Motor personal injury claims with a value between £1,000 and £10,000 in April 2010. This together with revised management systems were designed to speed up the claims settlement and saw the introduction of strict timescales and fixed legal fees.
Summary of Changes:
The RTA Motor personal injury limit will be increased from £10,000 to £25,000 for all claims which will speed up compensation payouts. The online portal system will apply to all EL and PL personal injury claims up to a £25,000 limit as from August 2013.
However, there are some claims that will fall outside the portal and examples of these are:
•EL disease claims where there is more than one defendant.
•Mesothelioma (Asbestos) claims.
Once a claim has been notified liability must either be accepted or repudiated within the below timescales, failure to do so will result in the claim being dealt with under the current system (outside the portal system) and allows claimants to recover costs on an hourly basis:
•RTA 15 Days (no change).
•EL 30 Days (currently 90 days).
•PL 40 Days (currently 90 days).
A matrix of fixed costs will be introduced depending on the size of the claim settlement within the portal system and these will apply from August 2013. Solicitors fees for claims falling outside this process have also been revised to ensure claims are not pushed outside of the portal process for a financial gain and this also goes live from August 2013.
Qualified one way cost shifting is a new system which means that defendants always have to pay their own costs. There will be exclusions to this which include:
•If the claimant fails to beat the defendants pre-trial offer.
•Where there is no reasonable cause for action. From any damages awarded the claimants solicitors can charge up to 25% for success fees, these were previously recovered from the losing party.
Additionally if claimants take out any After the Event (ATE) legal expenses cover this is no longer recoverable from the losing party. On cases where there is no conditional fee agreement in force, there will be a 10% increase in general damage awards to recompense the abolition of success fees.
In the event of a claim/or potential claim you will need to notify your broker immediately, ensure that all information is accurate and any supporting evidence or documentation is complete and provided within the timescales. This will help streamline the flow of information on liability and quantum enabling insurers to agree settlement quicker.
Significant Changes Affecting You
Referral fees have been banned. This prevents Solicitors from paying insurance and claims management companies for details of injured parties. Any MoJ forms received by you via the post must be forwarded to the insurers the same day, which will allow the insurer time to contact the claimant’s solicitors within the required timeframe. If you receive a claim notification form direct from the claimants’ solicitors you must acknowledge its receipt no later than the day after receipt.
Important Considerations For You
There is no doubt that the reduced timescales may cause issues for Managing Agents, Building Managers, Surveyors or Owners who are not on site at the time of the incident. Therefore in order to ensure that you are in the best possible position to defend any claims an increased emphasis should be given to ensure that management processes include:
•Accurate recording of any incidents when they occur.
•Immediate notification of all claims/potential claims to us.
•Investigations undertaken should be formally logged.
•Site visits recorded.
•Record keeping of inspections.
•Vetting of contract staff (cleaners/security).
•Formal contracts in place with contractors.
•Training records where required.
•Monitoring of visitor to properties.
In the mean time should you have any queries or require, further information, please contact your usual Aquilla contact.