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Rebalancing the fast track
DCA consultation on case track limits and the claims processed
for personal injury claims
Summary
Browne Jacobson recently submitted its response to the
Department of Constitutional Affairs considering the way in which
lower value claims are handled. The full response can be found here.
The paper covered four core areas:
- Small claims track limits (in particular for personal injury
and housing disrepair)
- Fast track limit
- An enhanced procedure for fast track personal injury (PI)
claims where the claim is valued at under £25,000
- Areas of improvement in the procedure for intellectual property
claims
The aim of the paper is to introduce a cost effective and rapid
means of resolving claims, wherever possible, without recourse to
the courts. Such procedures are much needed in this area where
claimant costs can frequently exceed damages.
Small claims track limits
The small claims track provides a rapid and effective means of
dealing with low value claims. Very limited recoverable costs
ensure that parties' investigations remain proportionate and
individuals are generally expected to be able to deal with claims
as litigants in person. From a defendant point of view, although
our own legal spend is not recoverable this is more than off set by
the avoidance of claimant solicitors' costs.
The small claim track limit currently stands at £1,000 in
respect of personal injury and housing disrepair claims and £5,000
for all other claims.
The Government proposes no change to these. In relation to
personal injury, the difficulties of a litigant in person of
considering quantum are cited in favour of this position. In
relation to housing disrepair, the vulnerability of the claimant
involved is relied on.
Our position is that the small claims track limit should be
£5,000 for all claims. However, in relation to personal injury,
there is a valid concern that the Judicial Studies Board (JSB)
guidelines for claims in the region of £5,000 are not sufficiently
clear for litigants in person to value claims. We have suggested
that the JSB should be invited to provide further guidance on
claims up to this value and the track limit uplifted thereafter. We
have therefore proposed an immediate increase to £2,500 for
personal injury claims.
If adopted, our proposals will result in an increased number of
low value claims falling within the small claims track. That will
allow for rapid, cost effective and fair resolution of claims of
limited value. In particular the proposals address concerns that
few personal injury claims currently fall within the small claims
procedure.
Fast track
The Government has proposed an increase in the financial limit
of the fast track to £25,000. It is not proposed to withdraw the
discretion to allocate claims to the multi-track where their nature
or complexity is such that this is justified.
The fast track recognises the fact that the majority of lower
value claims have similar evidential requirements and can run to
similar timetables. Analysis of our own claims both in terms of
costs and time measures shows that claims begin to require bespoke
handling where damages are above £25,000 to £30,000. The
Government's proposals therefore fit with our experience of claims
and we have supported these.
This will be significant in terms of the pre-action management
of claims under the enhanced procedure discussed below.
Enhanced fast track personal injury
procedure
The paper proposes a new procedure for personal injury claims
valued up to £25,000 which, where liability is admitted this
procedure will take a claim to its conclusion without proceedings
being issued.
Key features of the proposed system are:
- A form notifying the defendant of the claim, to be provided by
the claimant within five days of meeting with his solicitor
- A response on liability required in 15 days for claims relating
to an RTA or 30 days for EL and PL claims
- Where liability is admitted, the claimant will provide a
"settlement pack" to the defendant containing all evidence relevant
to quantum
- The claimant will be required to put an offer with the
settlement pack and the defendant will have the opportunity to make
a counter offer subsequently
- In claims below £2,500 where quantum cannot be agreed there
will be a procedure for referral of the settlement pack to a
District Judge for a decision on quantum.
- Fixed costs will apply to the regime and ATE premiums will not
be recoverable in relation to the early stages of the
procedure
- Consideration is given to measures for the standardisation of
contributory negligence, general damages and certain items of
special damages using a tariff. A proposed tariff is set out for
special damages items
The proposals are a response to the disproportionate costs which
are often incurred by claimant's solicitors in dealing with matters
of this type. These costs will often far out weigh damages,
particularly in claims towards the lower end of the fast track, and
will also far outstrip defendant costs. This is a result of front
loading and limited control of claimant investigations.
The procedure sets out promising proposals to address the above
concern. Time limits will certainly go some way towards controlling
front loading of investigations and unnecessarily extended
enquiries into quantum.
However, the key to the success of the proposals will be the
fixed costs structure adopted. The correct balance will have to be
struck between the claimant's ability to present a clear claim
which can be effectively investigated by the defendant and the
prevention of unnecessary or disproportionate investigations. We
have made proposals in our response for a fixed fee structure
applicable to the whole procedure. The precise level at which fees
are set will depend upon the structure adopted by the DCA and we
hope that they will consult further once that has been
determined.
The time limits set out in the consultation paper are bound to
cause some defendants concern, not only in relation to capacity
management but also in terms of their ability to deal with claims
which raise particular issues requiring additional
investigation.
While we recognise that many of our clients will be able to
adhere to the time limits in the vast majority of claims, we
consider that there will be a gap in the scheme if claims fell out
of it simply as a result of a minor breach. It is possible that
certain claimant solicitors could try to take advantage of this gap
by taking an obstructive approach to liability and failing to
provide reasonably required information beyond the minimum set out
in the forms proposed.
We have therefore proposed a slight extension to the initial
time limits and this should give flexibility so that minor capacity
management issues do not cause claims to fall outside the
procedure. We have also proposed a second phase of investigation to
be utilised by defendants where required. That would double the
investigation time available to the defendant but, in order to
maintain the balance of the procedure, it would come with a cost
penalty in the form of a small enhancement to the claimant's
recoverable cost of the initial stages of the procedure. We
consider this could be a particularly important facility in
relation to potential fraud claims which will often take additional
time to investigate.
The consultation raises specific questions about ATE premiums.
The proposals are quite rightly based on the position that where
there is no cost risk to a claimant there should be no recoverable
ATE premium. In our proposals on costs we have sought throughout to
avoid cost risk to a claimant with a view to arguing against
recoverability of ATE premiums in all cases. Overall this can be
expected to result in a significant saving to our clients.
In order to maintain this approach we have suggested that the
cost of the medical reports might be borne by the defendant in all
cases and of course that will be the position in any event where
liability was admitted. We have offset this by emphasising the
possibility of agreeing damages without medical evidence and
appropriate cases and also by providing a procedure for early
offers by defendants with a reduction of the claimant's recoverable
costs where these are not bettered.
Finally in relation to offers, we have proposed a system whereby
any offer which is within 10% of the final determination of damages
will amount to a successful offer. The proposed procedure does not
allow the claimant to recover costs of an assessment where the
offer they make with their settlement pack is not bettered. We
understand that claimant solicitors are concerned at this proposal
particularly given potential for injustice when a reasonable offer
is made. We believe our suggestion addresses this concern and also
provides some additional protection to Defendants where early
offers are made on their behalf.
Recommendations
It is not clear when the new procedure will be adopted, although
we understand the Government to be eager to implement change in
this area at the earliest opportunity. Details of the changes are
also unavailable at present.
We would ask our clients to monitor developments in this area
and to remain vigilant for any opportunities to provide input. We
will be doing likewise and will continue to represent our clients
interests in any future consultations in this field.
Any amended procedure that is produced is likely to include
strict time limits for defendant investigations. For those
struggling with time limits under the pre-action protocol, now is
the time to review procedures to see what simple efficiencies can
be achieved.
Key to this process will be information gathering. That is
typically the most time consuming exercise in determining a claim
and in many cases is the area with the most potential for further
efficiencies. For example, by ensuring accident report forms
collect all information required to reach a decision on liability,
significant delays can be avoided. Where the capability to produce
an electronic accident report form exists this may also assist in
the exchange of information.
Increased use of the telephone and email can also reduce
information gathering times. Relevant contact information should be
collected in accident report forms.
We are looking at ways we can support our client in light of the
proposed changes to procedure and are establishing a client forum
for this purpose.
If you would like to join the client forum then please click
here.
In the interim, if you have any queries please contact Sarah
White or Bridget Tatham.