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new process for low value injury claims arising out of RTAs

23 December 2009

In October we told you about the governments proposals in relation to a new process for low value personal injury claims, in our bulletin New process for low value injury claims arising out of RTAs.

In anticipation of an April 2010 implementation (a deadline the government appears determined to meet), we discuss the latest developments below.


Though delays have been rumoured, the latest information we have is that the government will ensure implementation on 6 April.

It is not clear when draft rules will be published though, with detail still to be finalised, it seems that these are unlikely to become available before the new year.

Outstanding issues

A number of issues are causing ongoing debate, in particular:

  • The wording of admissions
  • The applicability of Part 36 or equivalent rules
  • Interim payments
  • Rules in relation to small claims leaving the process.

Failure to beat an offer - cost penalties

Rather than relying upon Part 36, the process will include rules in relation to the implications of offers. The relevant test will be whether the claimant equals or betters his own offer. There will be no discretion for the Judge to depart from this strict rule and the Court of Appeal decision of Carver v BAA (which sets out a broader test of benefit in relation to Part 36) will have no application.

If a claimant does equal or better his offer at a Stage 3 hearing then he will be entitled to an award of interest of up to 10 on both Stage 3 costs and damages.

Interim payments

The interim payment process set out within the original government proposals will also be modified. Where a payment is due and a claimant seeks a sum above £1,000.00, a defendant may put a counter offer before an application is made. This increases the prospects of keeping a claim within the process.

Small claims

The process does not cater for small claims (claims where injuries are valued at less than £1,000). However, those that are initially valued above the small claims limit and so enter the process at Stage 1 may subsequently be shown to be of lower value and so exit the process at a later stage. In such cases, Stage 1 costs will not be recoverable.

With Stage 1 costs fixed at £400, this may result in a significant windfall to claimants who enjoy very limited costs recovery under the small claims track. The rule also has the potential to be abused, with the potential for claimants to adopt high estimates at the outset of a claim so as to secure additional costs.


Claims will exit the process when fraud is alleged, which is, of course, appropriate. However, where fraud is under investigation, it may be self defeating to make such an allegation, particularly as the rules will require supporting evidence to be supplied.

The practical answer to this difficulty will be to bring claims out of the process on other grounds, for example by refusing a response on liability, or alleging issues of causation or contributory negligence.


Insurers and defendants should be prepared to implement the new claims process on 6 April 2010, with arrangements to monitor both workflow on individual cases and overall workflow to ensure time limits are met and backlogs do not develop.

Much may rest on the efficiency of ancillary processes. Payments of costs and damages, for example, must be received by the claimants representatives within 10 days. Such time limits may require many insurers to streamline payment systems.

Processes should also be in place to identify and escalate any attempt to abuse the process, such as securing additional costs by over-valuing a small claim.

Give & take

While the new process is not without potential pitfalls, its overall impact is likely to be reduced spend both on insurers own legal costs (internal and outsourced) and on claimant costs.

Insurers who adapt to the process and prepare for its implementation will be best placed to take advantage of this opportunity, and we will continue to work with our own clients to ensure that savings are maximised.

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