From the claimants side
The proposals may have been greeted by some with a sense of relief, but there are a few stings in the tail. The small claims limit for personal injury cases remains at £1,000 thus avoiding any initial mass exodus from the market of claimant firms doing personal injury work. The new claims process only applies to motor cases thereby excluding EL and PL cases. This is welcome news in our view. Motor cases account for about 70-75 per cent of all personal injury claims, and are by their very nature less complex than EL and PL cases. The government has taken into account the concerns surrounding the unusual situation of suing an employer and the other pressures born out of that relationship.
It is also right that the simplified process and fixed costs regime will not apply to claims where the defendant raises contributory negligence or disputes causation. These issues only serve to increase both costs and time – both of which are hard to legislate for.
Where are the sanctions?
The claims process on paper appears a reasonable one with specified time limits for admissions of liability. However, those in everyday practice know that insurers find it difficult to meet their own service standards on turn around of post never mind 15 days for an admission of liability! The concern from the claimant side must therefore be as to where the teeth are should the insurers fail to meet this time limit. Is this to go the same way as protocol? No real sanctions for the failure to comply? The government has stated categorically that there should be no extension of time. It is hoped that the Civil Procedure Rules Committee will insert some staged costs penalties for failure to adhere to the rules.
In order for claimants to streamline their processes to meet this challenge, timescales and turnarounds are important and if insurers are unable to meet their obligations it is only the claimants and their solicitors who will suffer. Insurers suggest that a central postbox could be set up to receive notifications of claims. Some insurers are already trialling the process, and it is hoped that the practicalities of security issues can be overcome. Providing both the claimants and insurers have software to cope, it must be better for correspondence to be via email.
Common sense assessment
It is a relief that the government has not sought to introduce an assessment tool. Many claimant solicitors have found to their cost that insurers have been unable to increase their offers of settlement as a result of ‘sophisticated assessment tools’. This has led to a greater increase to issue proceedings, thereby prolonging claims and increasing costs, most times unnecessarily.
Claimant’s timescales
We now have five days to notify the defendants once we have gathered all the information. Work still has to be carried out as to what steps need to be taken before notification. It is hoped that this does not include detailed investigations but simply the basis of the pre-action protocol letter. The claimants also have 15 days in which to submit the settlement pack with the medical report once it is checked. There are some potential pitfalls with this, in that on occasion relevant information to special damages arises out of the medical report. It is important that these factors are taken into account when the rules are set.
The challenges
From the many changes proposed through this response and the changes in market forces, firms have found to there cost that they cannot afford to stay in the motor market. The wave of reforms has pushed firms to re-examine their overheads, and their costs of doing business, and some have realised that the profit margins are not sustainable. We must meet this challenge head on. It is clear that as claimant solicitors we must simplify our procedures, obtain volume cases and continue to work with our suppliers to ensure speed and quality. It has become clear that unless we streamline all our processes internally our weakest link will become our greatest problem. The claimants will do their part but will the insurers be able to cope?