Update-MOJ ‘Reforms’

Chris Lewis

Business Development Manager-Garwyn Ltd

Summary of Original Proposals

• A fundamental review of the personaI injury compensation process

• Scope-to include all personal injury claims ex clinical negligence cases

• Designed to ensure that claims are:- • Processed quicker• Cheaper• Less adversarial

Summary of outcome

• Delayed publication

• Limited Scope

• Limited changes

• Clarity yet to be provided in many areas

• ‘Could do better’?

Case track limits and the claims process for personal injury claims – main points and outcomes

Consultation proposal (April 2007) Outcome (July 2008)

Small claims limitTo remain at £1,000 for injury claims and £5,000 for others Accepted

Fast track limitTo be increased generally from £15,000 to £25,000 Accepted

Streamlined claims processTo apply to all non-clinical injury claims in the increased fast track

Now limited only to motor claims under £10,000

Detail of the processFive-day notification by solicitor after seeing claimantNotification via new standard forms15- (motor) or 30-day (other) admission by insurerEarly admissions of liability to be binding save for fraudSolicitor to prepare settlement pack and part 36 offerStandardised special damagesPossible assessment tool for general damagesDetailed timetable for negotiations and counter offersQuantum only determination by district judge

(To apply only to motor claims under £10,000)Five days to start only after initial investigationsNew standard forms retained for motor15 days (motor) retained and will not be extendableBinding admissions retained – binding on liability, not causationSettlement pack retained – but with discretion on part 36Standardised special damages retainedAssessment tool for general damages rejectedTimetable generally retained and simplifiedQuantum only determination (a hearing) retained with some changes

Fixed recoverable costsTo be staged through the streamlined process Staged fixed costs will apply only to motor injury claims under £10,000

Proposed v Actual-Detail 1• Scope

– Only changes beyond Case track limits are applicable to Motor only-EL/PL unaffected

• Case track limits reviewed/increased– Proposal that the small track limit remains at £1,000 for injury

claims and £5,000 for others-accepted– Proposal that the fast track limit to be increased generally from

£15,000 to £25,000-accepted

• Letter of Claim-Notification– Letter of claim replaced by standard claim form containing

minimum information-accepted– Five-day notification by solicitor after seeing claimant-to start

only after initial investigations

Proposed v Actual-Detail 2

• Liability decisions – Reduced decision timescales to 15 working days accepted for

Motor-and will not be extendable– 30 working days rejected for EL/PL– Early admissions of liability to be binding save for fraud-

accepted as binding on liability but not causation

• Costs– Fixed staged costs regime where liability admitted within

timescales-accepted for Motor claims but levels, sanctions and effect of arguing contributory negligence to be determined

– ATE insurance not recoverable where liability admitted within timescales-rejected

Proposed v Actual-Detail 3

• Negotiation Process– Tariff or assessment tool for general damages-rejected– Standardisation of some special damages-accepted-to be

subject of discussions Detailed timetable for negotiations and counter offers-generally

accepted and simplified Quantum only determination (a hearing)-accepted with some

changes Solicitor to prepare settlement pack and part 36 offer within 15

days of checking medical-accepted but with discretion on part 36

Implementation/What next?• No timescale for the introduction of the new process indicated. • The Civil Procedure Rule Committee to consider:-

– Draft rules– Practice directions– Pre-action protocols as appropriate

• Advisory Committee on Civil Costs to make recommendations on the fixed recoverable costs

• Government will be working with stakeholders in relation to:-– Fixed costs regime – Causation– Contributory negligence – Standardisation of special damages; claims notification; the

extent of investigation required before notification; – The interface between the new claims process and current pre-

action protocol.

So what does it mean to us? 1

• Motor?• A continued focus on speedy liability resolution • A possible review of reserving strategy once the detail of the fixed

costs regime becomes clear • A clear approach to arguments of contributory negligence and

avoidance of speculative denials of liability• Policyholders need to report claims ever more promptly using a

variety of methods• A continued focus on fraud to counter any perception that controls

will be less thorough faced with tighter timescales.

So what does it mean to us? 2

• EL/PL?• On the face of it no changes BUT• The Industry should continue to work toward the liability decision

making timescales originally proposed and resource and apply processes appropriately

We can all relax (?)

• Roy Hebburn, Divisional Claims Manager Allianz• “To restrict the 'new process' to non-disputed RTA claims up to

£10,000 is unambitious and a great opportunity to deliver faster compensation at reasonable cost has been missed. Neither claimants nor the premium paying public are winners here. The prospect of tactical manoeuvring has not been laid to rest and disproportionality in costs in low level personal injury claims will, we fear, remain a feature.

• To that end, our MoJ pilot for fast tracking investigation and PI claim handling will continue to ensure we are able to meet the reduced parameters but to say that we are underwhelmed would not put the

case too highly