Lehna Hewitt, Trainee Solicitor
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What is it?
Some people claiming compensation after being injured in road traffic accidents may now be able to receive their compensation more quickly and efficiently thanks to a new online claims system.
The new system applies to low value personal injury claims arising from road traffic accidents which occurred on or after 30 April 2010. Claims are submitted via a secure electronic portal system to the insurers of the driver thought to be responsible, who in turn reply electronically.
Justice Minister Bridget Prentice summarised the purpose of the new system, claiming that, “people do not need any more stress after being involved in a road accident. This scheme means that everyone knows in advance what the costs will be and it will be simpler and quicker to complete a claim”.
The new system is vast in terms of scale and significance. Statistics published by the Law Society Gazette suggest that eventually around 500,000 claims each year, which amounts to 75% of all personal injury claims, will be processed via the electronic portal.
This article is intended to summarise how the new system works, and provide current and prospective claimants with a better understanding of how their claim might progress through it.
When does it apply?
The new claims process only applies when:
- The injuries were sustained in a road traffic accident;
- The accident happened in England and Wales;
- The accident happened on or after 30 April 2010;
- The value of the claim is between £1000 and £10,000. and
- The accident was not caused by a foreign registered vehicle.
If any one of these criteria are not met, the old paper-based system will still be used.
Why was it introduced?
The stated aims of the new system are to make it easier for claimants to bring a claim and to reduce the time it takes for them to receive their compensation. The idea is that this is achieved by the introduction of a new set of short, strict deadlines which must be met. In addition, the fact that the system is electronic should mean that correspondence exchanges between the claimant’s solicitors and the insurers are reduced. The theory is that the process is more simple and efficient, as the delays of traditional paper correspondence are eliminated.
The new process also reduces the scope for court proceedings and hearings. The fees paid by the insurers to the claimant’s solicitors costs are reduced, as the process sets fixed costs payable at each stage of the process.
How does it work?
The new system is split into three defined stages. Each stage has its own deadlines which must be strictly adhered to. If a deadline is missed, or if liability is not admitted in full, the claim exits the system and is dealt with in the old way.
Recent figures suggest that, at present, approximately 60% of cases stay in the system, whilst the other 40% exit the process and are dealt with under the old system.
Stage 1 – claim notification
Under the old system, the claimant’s solicitor would initially send a “Letter of Claim” in the post to the insurers.
Under the new system, the claimant’s solicitor instead completes a standardised “Claim Notification Form”, and submits this electronically to the insurers via the online portal. Before the Form is submitted, the claimant must carefully check the contents for any factual inaccuracies, and authorise the solicitor to submit the form.
The insurers then have 15 working days to respond to the claim and admit or deny liability. This deadline can be beneficial from the claimant’s point of view. Under the old system the insurers had 21 days to acknowledge the claim and then a further 3 months to investigate liability – a frustrating length of time for the claimant
Once the 15 days are up, if the insurers admit liability, the claim moves on to Stage 2. If they deny liability, or fail to respond, then the claim leaves the system and continues under the old system. There is no lee-way on this time limit.
Stage 2 – medical evidence and offer to settle
The next step is for the claimant’s solicitor to obtain the claimant’s GP and/or hospital records and arrange for an examination with an independent medical expert.
The examination will take place at a clinic or hospital close to the claimant’s home. The medical report is one of the most important pieces of evidence in the claim, as it is used to determine how much compensation the claimant will receive.
The report will cover the nature and extent of the injuries, the recovery, any ongoing or permanent health problems arising from the injuries, and the effect the injuries have had on the claimant’s life.
There is no fixed timetable for obtaining the report.
Once the report is received, the claimant must read it carefully and approve the contents. It is important that the claimant is very thorough, as there is no opportunity to raise factual errors once the report has been sent to the insurers via the portal.
The claimant’s solicitor must then complete a “Settlement Pack”. This is a further standard form which outlines claimant’s financial losses such as loss of earnings, prescription charges and care and assistance provided by family or friends. The claimant should submit receipts where available, in order to prove their losses.
The claimant’s solicitor must then send the medical report and Settlement Pack electronically to the insurers. The claimant’s solicitor will also advise the claimant of the value of their claim and, with their authority, put forward a settlement offer at this stage.
The insurers then have 15 working days from receipt to consider the offer and either accept it or make a counter-offer. If they make a counter-offer, they must set out their reasons for disagreement of the claimant’s figures.
After this period of 15 days, there will be a window of 20 working days for negotiation between the parties. If the insurers make a counter offer before the 15 days has expired, the window for negotiations is made up of the remainder of this 15 days, plus the 20 further days.
Hopefully, the claim can be settled at this stage and the claimant should then receive their compensation within 10 days.
Stage 3 – court hearing
Where settlement cannot be agreed at Stage 2, an application is made to court by the claimant’s solicitor to determine the value of the claim.
The hearing will be done on paper, rather than orally, meaning that no one has to give evidence in court. This is less stressful for the claimant as they do not face the prospect of standing up in court, but it also means that the judge does not hear what the claimant has to say and makes an award based only on the limited documentation available.
The judge will reach a decision based on the paper evidence, and the claim is then concluded.
Is it successful?
There is no doubt that the shorter deadlines and elimination of paper correspondence under the new system means that it is quicker and more efficient than the old system. Claimants whose cases qualify and stay within the system are generally receiving their compensation at an earlier stage. Some claims are being settled in well under 6 months.
Are there any disadvantages for claimants?
When the new system was originally introduced, there were some technological hiccups which led to delays. However, most teething problems seem to have now been overcome. The system is constantly being upgraded, and as solicitors and insurers are becoming more familiar with it, it is working more and more efficiently.
Probably the main concern from the claimant’s perspective is that at Stage 3 of the process, the judge makes their decision based on the paper evidence rather than the parties’ oral evidence. This means that the claimant does not have the opportunity to explain their evidence in detail to the judge. However, this disadvantage has to be balanced with the corresponding advantage, which is that the claimant does not face the prospect of standing up in court and being cross-examined on their evidence.
A further concern is that the system is very formulaic, with little scope for discussion between solicitors and insurers.
What does the future hold?
The new system seems to be working well and there is no doubt that it is here to stay. In fact, the Ministry of Justice is considering widening the scheme to cover other types of claims (employers’ liability, public liability and clinical negligence claims) and raising the upper limit from £10,000 to £25,000 or even £50,000. However, it is acknowledged that substantial modification to the system will be required for higher value claims as they tend to be more complicated.
Prospective claimants should be aware that they must bring a claim within three years of the date of the accident, or else their claim will become statute barred.
At Anthony Gold we have a team of expert personal injury solicitors who deal with claims submitted via the new process as well as those which either do not qualify at the start of the claim due to their value, or those that fall out of the system subsequently. If you have been injured in a road traffic accident then one of our team will be happy to explain how we can help.
Lehna Hewitt is a Trainee Solicitor in Anthony Gold's personal injury department. For further information email Lehna or call 020 7940 4000.
