The DWP website has the following to say about CRU liability in professional negligence claims:-
3.1 Professional negligence (See Part 1 Section 4.8)
If a claim is made in respect of professional negligence and the particulars of claim, statement of claim or letter before action does not include a claim for compensation as a result of the original accident, injury or disease, completion of form CRU1 is not required. If details of benefits paid are required, a request should be made to the relevant DWP benefit paying office. If you have already sent CRU a CRU1 for such a case please let CRU know as soon as possible.
Where compensation is also to be paid as a result of the original accident, injury or disease, form CRU1 must be submitted by the compensator.
4.8 Professional negligence (paragraph 3.1 also refers)
Where a claim is made for professional negligence and the particulars of claim, statement of claim or letter before action includes a claim for compensation as a result of the original accident, injury or disease, form CRU1 must be submitted and any listed benefits and or lump sum payment paid in consequence of the original accident, injury or disease will be recoverable.
In solicitors’ claims following a “lost” personal injury claim the claimant may well set out his claim based on the damages he contends he should have recovered in the underlying action – for the “lost” compensation as a result of the original accident, injury or disease. On one reading, the information from the DWP suggests that the solicitor might be liable to pay the CRU in such a case. Can that be correct?
Liability to repay benefits is set out in the Social Security (Recovery of Benefits) Act 1997. Section 1(1) of the Act provides that defendants must repay benefits where they make a payment “in consequence of” the accident, injury or disease.
Are damages for professional negligence resulting from a “lost” personal injury claim “in consequence of” the accident, injury or disease? In one sense, yes, because had there been no accident, injury or disease there would be no professional negligence claim. But the correct analysis must be that the damages for professional negligence compensate the claimant for pure economic loss – the loss of damages in the underlying personal injury claim – rather than being damages in consequence of the accident, injury or disease itself.
Recoverable benefits do, however, make a difference to the compensation a claimant is entitled to recover when a personal injury claim has been lost. Where recoverable benefits have been paid, the Defendant in the underlying action would have been able to offset certain of these benefits against certain heads of loss. The damages for, say, past loss of earnings that the Claimant would actually have received would be reduced by the amount of the benefits offset-able against it. So the value of a “lost” claim is the value once account has been taken of the benefits which the underlying defendant would have been able to offset. This works to the solicitor’s advantage, because whereas the underlying defendant would be liable to repay the DWP, the solicitor, is not.