The Ministry of Justice (MOJ) has been hard at work implementing plans to widen the existing regime for road traffic accident (RTA) claims up to the value of £10,000. On 8 March 2013 the Civil Procedure Rules Committee (CPRC) is set to review new pre-action protocols which extend the existing regime to cover all RTA, employers’ liability (EL) and public liability (PL) claims up to the value of £25,000. The new rules will apply to all such cases by the end of July 2013.
In this article we look at some of the more controversial changes to the RTA pre-action protocol (“the protocol”) which are not subject to review by the CPRC.
From 1 April 2013 all RTA claims valued at between £1,000 and £25,000 must be submitted to an online portal. There they will remain until conclusion provided liability is admitted and done so within 15 working days of submission. The change to £25,000 significantly increases the number of claims now captured and encompasses cases involving injuries which are potentially life changing.
Costs sanctions will apply if the protocol is not complied with, meaning that significantly reduced legal fees are likely to be awarded if the portal is not used.
Paragraph 3.18 of the new protocol says one of the aims is to ensure that legal representatives receive fixed costs at each appropriate stage. Under the existing rules, costs are payable at the conclusion of each stage. Paragraph 6.18 of the new protocol however will require stage one and two costs to be paid at the same time and at the end of stage two.
Despite being in direct conflict with an aim of the protocol, the new rule is being hailed as a positive move by insurers who claim it will put an end to instances where claims are started just for the sake of obtaining stage one costs. Stage one costs are only recoverable once an insurer has admitted negligently causing the accident resulting in loss for which they are liable to pay damages. This is overlooked by lots of insurers who brand claimants as fraudulent. Overall, very few claims are started with the sole objective of obtaining stage one costs. If they are, this reflects more poorly on representatives than it does claimants as damages are only recovered at the end of the case.
The new rule may result in premature offers being made which cannot be said to be in the interests of the injured person. At stage two the claimant is required to make an offer in full and final settlement of the claim. Not all injuries settle in line with the prognosis given by an expert. The claimant’s representative therefore runs the risk of under-settling a claim by proceeding to stage two when the claimant’s injuries have not yet resolved. A clear example here of the regime being more concerned with settlement rather than ensuring that claimants are appropriately compensated.
In a further controversial change paragraph 7.2A requires the claimant to send to the defendant any medical records referred to in the medical report.
Last month in a presentation given by Portal Company Limited (the organisation responsible for extending the portal), it was said that since April 2010 the existing regime has improved communication and lead to swifter settlements in a number of cases. The new protocol endorses this approach by requiring communication outside of the process to be made by email.
Human Rights, confidentiality and data protection arguments regarding transmission of medical records by email aside, it appears insurers will routinely request medical records from the claimant where causation is considered an issue or for no reason at all and the records will have to be supplied.
For the case to remain on the portal, liability must be admitted, but the nature and extent of the injuries does not. A medical expert is usually asked by the claimant’s solicitor to report on such issues for the court. There is no provision in the protocol for defendants to question existing experts or obtain expert evidence. It begs the question why the MOJ considered it appropriate for insurers or claims handlers, without medical training, to argue what is and is not attributable to an accident on the face of the medical records despite the opinion of a medical expert.
In a further surprising change paragraph 7.2B says that it is not expected that the expert will need to see any medical records where the claim is worth less than £10,000. To my mind the rationale seems to be that these lower value injuries are deemed too insignificant to warrant thorough investigation by an expert.
To insurers, such a rule gives enormous scope to argue against paying the access fee where it was reasonable to request medical records, despite the value of the claim. If a defendant refuses to pay presumably costs proceedings may be brought but this is unlikely in practice meaning claimant’s representatives will be left with little recourse to do anything about it. If records are not obtained before the expert advises and a dispute on causation later arises, this leaves the absurd result of parties arguing over issues which should rightly be left to an expert, who has not himself reviewed the records in forming his opinion.
The court challenge by claimants’ solicitors regarding the government’s lack of consultation in reducing portal fees has failed and there is no news yet on whether an appeal will be made. As matters stand, fees for such cases look set to be significantly reduced at a saving of £200 million to the insurers of motorists who cause accidents. This is perhaps the most significant change of all as many solicitors will not be able to represent injured people for such low fees. Sadly, many claimants will have to negotiate settlements with insurers directly, without representation and advice as to what their claim is really worth.