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Government announces fast track reforms
25 July 2008
The Government this week confirmed it will increase the fast
track limit to £25,000, but reform has been watered down by the
announcement that procedural change will only apply to sub £10,000
claims relating to RTAs.
To find out about the impact of the changes try our
“how will it
affect you?” tool.
Defendants dealing with these claims now face the challenge of
operating to an all new procedure within tight, non-negotiable
deadlines. We will be working with clients to help manage this
change and the pressures the new procedure will bring.
What’s new for low value RTA claims
The new process for RTA claims under £10,000 will include:
- Five days for claimant to submit claim notification form, from
the date the claimant solicitor has ‘all relevant information’
- Non- extendable 15 days for defendant to respond in relation to
liability
- Introduction of settlement packs
- Standardised figures for elements of special damages
- Streamlined procedure to refer claims to a judge for decision
on quantum
- Fixed fees – the fee structure has yet to be confirmed, but it
seems ATE insurance will be retained
Click here to see the procedure
flowchart.
The availability of a simple process to refer a claim to a judge
will provide a quick and cost effective means of having a dispute
in relation to quantum resolved. It is however unfortunate that the
reforms do not routinely envisage this decision being made on the
papers alone.
Claims will fall outside the procedure if:
- Insurers fail to comply with the strict 15
day deadline
- They involve issues of contributory
negligence or
- Causation of injuries is called into
question
These exceptions must be carefully and pragmatically applied by
defendants and Insurers if they are to maximise the number of
claims handled within the new scheme and thereby control claimant
costs.
The question of costs has been referred to an Advisory
Committee. This will be key to the effectiveness of the reforms.
Sub £10,000 RTA claims are already subject to the predictive costs
scheme, which has been successful in controlling costs. Fixed costs
under the new procedure should reflect the streamlined nature of
this new process and must also be pitched at a level which ensures
claimants do not have an incentive to sidestep the process.
Broader reform?
The new claims process is limited to some of the most
straightforward PI claims. However, since motor claims
account for 75% of all claims, and the majority are of low value,
the opportunity to reduce claims spend presented by these reforms
should not be underestimated.
The challenge for defendants, insurers and their advisors is to
make the process as effective as possible which may well encourage
the Government to embark on a wider programme of reform.
Preparing for change
The reforms set demanding targets for defendants. The time for a
decision on liability is slashed by 75% and any admission will be
binding. The exclusion of claims from this scheme where
liability is denied or where contributory negligence or causation
is raised, will mean that decisions on these issues will
increasingly be informed by the economics of a claim.
We are committed to supporting our defendant and insurer clients
in meeting the operational challenges inherent in this
reform.
Services will include:
- Rapid response advice
- Peak-demand support
- Policy advice and insurer/insured
mediation
- Updates and advice on reforms
- Awareness training
If you would like to know more about the reforms, or the steps
we are taking to respond to them, then please contact Nick Parsons or
Simon
Robinson.
The content of this bulletin is provided for
the purposes of general interest and information. It contains only
brief summaries of aspects of the subject matter and does not
provide comprehensive statements of the law. It does not constitute
legal advice and does not provide a substitute for it.