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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. 

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 

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 we offer include:

  • Rapid response advice
  • Peak-demand support
  • Policy advice and insurer/insured mediation
  • Updates and advice on reforms
  • Awareness training

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