Disappointed? - You will be

The Ministry of Justice has finally, after many months of consideration, raised their collective heads above the parapet. Immediately, and justifiably, they were attacked from both sides. The fact that both claimant and defendant lawyers expressed disparaging views about the clearly watered down proposals is a strong indicator that this was not this government’s finest moment.

You may recall that the government wanted to undertake a root and branch review of the claims process to speed up the process, bring costs under control and place the consumer first. A grand plan, followed by extensive consultation and a lot of work from APIL, FOIL, the ABI and others, has led to a severely castrated version of the envisaged changes.

In short, what we have is

• Small Claims Limit remains at £1,000 – no surprises there

• Fast Track Limit raised to £25,000 – looks good but read on

• Save for increased Fast Track Limit EL and PL cases are unaffected

• New Claims Process with value limited to £10,000

• New Claims Process limited to Road Traffic Claims only, to which the following will apply

• A new early response system to claims intimated. Claimants must send out a ‘claims notification form’ within 5 days of having gathered all ‘required information’ -  Any claimant solicitor worth his salt will find a way to ensure that ‘required information’ is as widely interpreted as possible. Also, who will police this?

• Insurers must respond within 15 days - I will allow a moment at this stage to allow everyone to recover. Consider a fleet road traffic policy. It is not unusual for a claims notification to be passed from a branch office/trading address to a head office, possibly sit on someone’s desk whilst they are on holiday, then be passed to a broker and then to the insurer. Insurers should be aware that they may have less than a week to make a liability decision (or be overdue by the time it arrives) and the new guidance does not allow for extensions of time. Save for fraud, the admissions will be binding.

• A consultation (yes another one) is likely once the MOJ have considered the fees to be paid. This is where it will stick as agreement has to be reached over a fee to be paid to the lawyer to handle this or perhaps a series of staged fees – the haggling will be extensive and could delay matters for some time. Referral fees will not be added to any fixed costs, which is some good news.

• General Damages will not be subject to any tariff but Special Damages will, with particular attention to care rates

• The Government has not interfered with the ATE marketplace. They believe it will adapt to the changes. However, they did comment that they thought that there was no need for ATE insurance where an early admission of liability was received.

• Damages will be assessed at a hearing unless the parties agree to a paper assessment by a District Judge

• ADR is unlikely to feature due to low value and simplicity
  

This is it. No more to be added. If you read the proposal and any of the response you will appreciate what a compromise this is from the original intention. Rules still need to be drafted, costs figures agreed and consultations concluded before this can move forward. Expect nothing before 2009 and possibly beyond.

For further information on this and how it will affect your organisation contact Crutes Law Firm.

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