Parliament considers 'quick and simple' compensation scheme for road traffic accidents
9 Mar 2010 07:57 AM
People claiming compensation after being injured in road accidents will be able to receive their compensation more quickly and simply under a new fast-track process put before Parliament today.
The scheme introduces fixed stages and costs with set deadlines for both claimants’ and defendants’ solicitors, according to how many stages a case has to go through before it is settled. It will apply to road traffic accident personal injury claims valued between £1,000 and £10,000, which in the past have formed the vast majority of claims.
The aim is a process which delivers fair compensation to the claimant as soon as possible at proportionate cost. The process will be made even quicker through a new industry led online portal which will allow solicitors to share information quickly, efficiently and securely.
The details of the new process have been developed by Ministry of Justice in consultation with stakeholders from both sides of the industry while the fixed costs were agreed by bodies representing claimants and defendants’ solicitors following a mediation process overseen by the Civil Justice Council. The scheme is set to come into effect on 30 April 2010.
Justice Minister Bridget Prentice said:
‘People do not need any more stress after being involved in a road accident. This scheme will mean that everyone knows in advance what the costs will be and it will be simpler and quicker to complete a claim.’
‘The proposed scheme with the online technology allows solicitors to communicate more effectively and encourages early notification of claims, early admissions of liability and early settlements.
‘Government and the industries involved have worked closely together to establish a scheme within which people can be confident that the professionals they are dealing with are resolving their conflicts as quickly, simply and cheaply possible.’
The new process is split into three stages:
- Stage 1 – the claimant solicitor completes the claim notification form and send it to the insurer who may admit/deny liability.
- Stage 2 – if liability is admitted, the claimant obtains a medical report and the process continues with offers and negotiation of a settlement to a strict timetable.
- Stage 3 – where the parties cannot agree a settlement an application is made to court for a quantum hearing.
Each of those stages has fixed costs and deadlines depending on the circumstances. The online portal at RTA personal injury claims has more details. Their guidance page on costs and time limits is reproduced below.
Notes to editors
- For more information, please contact the press office on 020 3334 3536
- This scheme follows the 2007 consultation paper ‘Case track limits and the claims process for personal injury claims’.
- The Ministry of Justice guidance on the fixed costs and time limits is as follows:
Stage 1 - Providing early notification of claims to defendants and insurers
- The claims notification form will be sent electronically to the defendant's insurer and the claimant solicitor or the claimant will sign the statement of truth on the CNF.
- The defendant's insurer will send a receipt to acknowledge receiving the CNF.
- All the fields on the CNF must be completed with the exception of the referral source field.
- When the CNF has been correctly completed, the defendant's insurer will have 15 business days in which to respond - electronically - with the exception of the Motor Insurers' Bureau, which will have 30 days to respond.
- Fixed recoverable costs of £400 will be paid at the end of Stage 1 where liability is admitted (whether or not contributory negligence is alleged). A 12.5% success fee will be applied to Stage 1 fixed recoverable costs where a conditional fee agreement is in place. However, the success fee element for Stage 1 will only be payable at the end of Stage 2 where the case settles.
Stage 2 - Medical evidence, offers to settle and negotiation
- Once the defendant's insurer has made an admission of liability, the claimant solicitor will obtain a medical report.
- Where it is clear from the outset that an additional medical report is necessary from a medical expert in a different discipline, a second report may be obtained from a medical expert in that discipline.
- The acquirement of medical records will only be allowed as a disbursement where the medical expert has identified a need for them.
- There will be no fixed timetable for obtaining the medical report.
- Within 15 business days of the report being confirmed as factually accurate, the claimant solicitor will complete the Stage 2 settlement pack form. This will be sent electronically to the insurer, together with the medical report and any receipts/evidence of special damages claimed.
- The insurer has 15 business days from receipt of the settlement pack to consider and either accept the claimant's offer or make a counter offer.
- Where the defendant's insurer makes a counter offer, there will be a further 20 business days for consideration and negotiation between the parties.
- Where agreement on quantum has not been reached at the end of the 20-day consideration and negotiation period, the claimant will prepare the Stage 3 version of the settlement pack form.
- Where the parties have not reached agreement to settle the case by the end of the negotiation period, the next step will be a Stage 3 hearing to determine quantum.
- Fixed recoverable costs of £800 will apply to all claims taken forward under this process from the beginning to the end of Stage 2. This will attract a 12.5% success fee uplift where the case settles in those cases where a conditional fee agreement is in place.
Stage 3 - Where quantum cannot be agreed
- Where quantum cannot be agreed by the end of Stage 2, an application will be made to the court to determine quantum.
- There will be separate fixed recoverable costs for claimant solicitors for Stage 3 of the process for paper (£250) and oral hearings (£500). There will also be a fixed success fee of 100% for those cases where a conditional fee agreement is in place. This will only apply where the claim concludes at trial and the claimant has won.
- Where an offer is made and settlement is reached between the issue of the claim and before the trial commences, fixed recoverable costs of £250 will apply and there will be a fixed success fee of 12.5% for those cases where a conditional fee agreement is in place. The agreed damages and fixed costs should be paid within 10 days of a settlement being reached.
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