The Government have today published the long awaited and overdue response following the lengthy consultation process carried out last year. This can be found at

http://www.justice.gov.uk/publications/cp0807.htm.

The main points from the Response are summarised below:

Track Limits

  • Small claims – no change, this remains £1,000 for personal injury claims and £5,000 for all other claims.
  • Fast track claims – to be increased from £15,000 to £25,000.

New claims process – applies to RTA claims only

A new streamlined procedure for RTA claims, provides for early notification of claims between £1,000 - £10,000, introduction of fixed time periods and fixed recoverable costs:

  • Fixed recoverable costs – to be fixed upon advice from the Advisory Committee on Civil Costs.
  • Claim Notification Form – to be completed and served by the Claimant’s solicitor within 5 days of gathering “all required information” necessary to complete the notification form (as opposed to 5 days from taking initial instructions).
  • Decisions on liability to be made by insurers within 15 working days. No extensions available. Once liability is admitted the Claimant obtains medical evidence which is served within 15 days of obtaining the same, together with a settlement pack including schedule of special damages and the Claimant’s offer to settle.
  • Admission of liability to be binding, save in cases of fraud.
  • Where liability is denied or contributory negligence is alleged, the claim is dealt with outside this new claims process.
  • Part 36 offers – no change however more emphasis is to be placed upon judicial discretion, so that if an unrealistic offer is made resulting in a quantum hearing the party making the unrealistic offer should be penalised.
  • Recoverability of ATE premiums – no change. The proposal that premiums should only be recoverable where liability is denied will not be carried forward.

The Civil Procedure Rule Committee will now consider draft rules and pre-action protocols in implementing the new claims process and the Advisory Committee on Civil Costs will make recommendations on the fixed costs.

Insurers will have been waiting to assess the likely impact of this response and will be relieved that the new claims process is limited solely to motor cases, rather than to EL/PL (and clinical negligence) claims. However, motor insurers will need to carefully balance the clear financial advantages of appropriate early admissions of liability with the potential damage to their reputation by inappropriate early admissions made solely for commercial gain. Such a purely commercial approach may ultimately encourage unmeritorious third party claims and result in policyholders seeking their insurance elsewhere.