A new pre-action protocol (PAP) applicable to low value employers and public liability claims arising from accidents occurring on or after 1 April 2013 has been drawn up with a view to finalising and implementing it by April 2013.

As currently drafted, the new protocol will apply to injury and disease claims valued between £1,000 and £25,000. This may change however as current drafting seems to intend exclusion of cases below the small claims limit.. This limit is likely to be increased to £5,000 from April 2013 and if that happens it may be that cases below £5,000 in value are excluded from the PAP.

There are some other exceptions. Fatal accident and mesothelioma injury cases, claims where a Defendant is insolvent and there is no identifiable insurer or, for disease claims where there is more than one Defendant, for example will all be outside the new PAP provisions.

If the protocol should apply, it will be open to the court to apply cost sanctions when the protocol is not followed.

Any reference to "days" in the PAP and below, means business days (i.e. Monday to Friday) excluding weekends, and excluding public holidays. A reference to 30 days for example is in fact a six week period.

Under the PAP, Claimants will be required to complete and submit a Claim Notification Form (CNF) to the intended Defendant and their insurer (if known). The form will be submitted by email via a portal, or posted if that isn't possible. An electronic acknowledgment must be sent the day after receipt of the CNF and a response submitted:

  • to an employers liability claim within 30 days
  • to a public liability claim within 40 days

All communication will be by e mail.

The protocol then continues to apply to cases in which there is an unqualified admission of liability.

In employers' liability claims, the Defendant has 20 days from the date of his admission to verify any loss of earnings claim made. Non-compliance at any stage will take you out of the PAP.

That will conclude Stage 1 under the PAP.

Assuming the claim survives Stage 1, in Stage 2 of the PAP the Claimant needs to obtain, check and approve a medical report. Once approved, the Claimant has 15 days to complete and submit a Settlement Pack (SP) to the Defendant. This will include an SP Form, the medical report (and any other expert evidence relied on), evidence of financial loss and disbursements incurred, medical records which the medical expert considers relevant, photographs of injuries, and witness statements which are needed to value the claim. The SP form should include an offer of settlement from the Claimant.

When submitting the SP to a Defendant a Claimant can also seek an interim payment of £1,000 (more than one interim payment can be sought if the claim is valued at over £10,000). Defendants must make the interim payment within 10 business days of receiving the SP. The payment is on account of the compensation that will be payable for pain and suffering so is ring fenced from any deduction for repayable benefits. If a Claimant asks for more than £1,000 as an interim payment then the Defendant must pay at least £1,000 within 15 days, or any higher sum less deductible benefits. If benefits are deducted they must be repaid to the Compensation Recovery Unit at the same time that payment is sent to the Claimant.

In addition to any interim payment, Defendants must pay Stage 1 fixed costs within 10 days of receipt of the SP.

Defendants have 15 days to consider the SP and either accept the Claimant's offer of settlement or make its own offer. A further 20 days is then permitted for further negotiation. Both of these periods though are extendable by agreement, and in any event will be extended by 5 days if an offer is made 5 days or less before the end of the total 35 day period. If a Defendant makes an offer it must break it down by reference to the types of compensation claimed (i.e. £x for pain and suffering, £x for loss of earnings etc) and where this is less than what is sought by the Claimant, explain the reason for that. Any offer to settle which is accepted will bind the Defendant to pay Stage 2 fixed costs and disbursements (and for disease claims any success fee due if the Claimant's solicitors have a conditional fee agreement which they enter into before 1 April 2013).

If agreement is not reached within the Phase 2 PAP period, the onus is then on the Claimant to send a Court Proceedings Pack (CPP) to the court and to the Defendant. The Defendant must within 15 days of receipt of the CPP pay its previous final offer of damages to the Claimant (less deductible benefits and any interim payment already made) plus the Stage 2 costs and disbursements.

The court proceedings are then to be governed by a Practice Direction which was originally introduced to deal with low value road traffic claims.

Within 14 days of service a Defendant must file an Acknowledgement of Service and indicate any objection to the matter proceeding to Stage 3.

Where the court considers further evidence is needed to value the claim or for any reason thinks the claim is not suitable to continue to Stage 3 then the claim will be put on the appropriate track and directions issued and the case comes out of the PAP route.

If however the court agrees the matter can go to Stage 3, then the court may assess the claim on the papers, or request a hearing on 21 days notice. Stage 3 costs payable to a claimant's solicitor will also be fixed.

The schedule of what the fixed costs will be has yet to be published but will almost certainly be substantially less than the sums which Claimant's solicitors typically claim in these cases. That being the case, we anticipate that Claimant's solicitors will not be bending over backwards to keep claims within protocol but it will generally be very much in a Defendant's interests to try and have cases determined under the PAP to limit its liability. In the circumstances it is vital that you gear up now to be able to respond to a Claimant on liability much faster than the current PAP.

The above is a summary only - there are detailed provisions which relate to cases involving children for example and permitting challenges for example to the disbursements claimed. From a defence perspective though, the key timetabling you need to be achieving (working towards is not good enough), based on the current draft PAP will be as follows:  

Click here to view tables.

Since Defendants will not generally be entitled to costs as a Defendant in an injury claim, win or lose after April 2013, where your assessment is that primary liability will be established, our advice would be to think very hard before pursuing contributory negligence arguments at all once a CNF is received, since a response to raising such arguments will take you outside the scope of the PAP and the protection of having to pay only fixed costs.

For example: a claim worth about £10,000 is advanced. You think you will be liable but you think the Claimant was partially to blame for failing to look where he was going and avoid the hazard on the factory floor. It is rare for contributory negligence deductions to amount to more than 50% but let's assume you do ultimately achieve a saving of £5,000. Arguing contributory negligence will have automatically taken you out of the protocol. That means when you pay the £5,000 compensation, while patting yourself on the back for the saving achieved, you will also have to pay all of the Claimant's costs in addition to your own, and even if you settle pre-proceedings, it is a reasonable bet that those costs will exceed the £5,000 saved on damages. If, however, you don't raise contributory negligence after the CNF, and keep the case in protocol, while you may have to pay £10,000 in damages, the Claimant's costs are likely to be counted in hundreds of pounds rather than in the thousands. In terms of overall cost then, in most of the cases valued up to £25,000 you are likely to be better off not raising contributory negligence as an issue. Our advice would be to at least pause and consider if, commercially, there is any probable benefit, before moving forward in that way.