Civil Litigation Update – Extension of Civil Protocols

This month we are continuing our review of recent changes to Civil Litigation Procedure. Our focus in this article will be on a new procedure that must be followed before any Court action can be taken in road traffic claims (RTAs), claims against employers or public liability claims. This procedure is referred to as the RTA pre-action protocols.

By way of background, the RTA scheme was originally introduced on 31 April 2010 to deal with claims worth between £1,000 and £10,000. The scheme was extended on 31 July 2013 to include RTA claims worth up to £25,000. The changes followed a relatively quick process of consultation with the profession called ‘solving disputes in the County Court’. The RTA scheme was considered to be successful in streamlining the litigation, with reports that some cases were taking four months rather than a year to complete. It was decided in January 2014 that the scheme would be extended to include claims against employers and cases of public liability.1

The Procedure

The procedure is divided into three stages. It must be managed through an electronic process by the claimant’s Solicitor and the defendant’s insurer/Solicitor. A fixed fee is charged at each stage of the process.

Stage 1 – claims notification and liability

Claims notification – To start the process, the claimant’s Solicitor must complete a claims notification form (CNF). The CNF will automatically be sent electronically to the defendant2 and the defendant’s insurer.

The insurer must acknowledge receipt of the CNF and respond within 15 business days (30 days for the Motor Insurance Bureau [MIB]). An admission of liability is essential for the claim to stay in the RTA protocol. This stage is used to establish liability. If liability is not admitted, then the claim will exit the protocol.

Where liability is admitted, fixed recoverable costs of £400 are payable within 10 business days of the end of the 15-day period.

Stage 2 – medical evidence and offers to settle

If the insurer and/or defendant admits liability, quantum will have to be determined. The claimant’s Solicitor will then obtain a medical report of the Claimant’s personal injury. Within 15 days of the report being confirmed as factually accurate, the Claimant’s Solicitor will complete a stage 2 settlement pack, containing the medical report, a schedule of damages and an offer to settle the claim for a specified sum from the defendant’s insurer, and it will be sent electronically to the insurer.

The insurer will then have 15 business days to consider whether to accept the claimant’s offer or make a counter-offer. The insurer has 35 days to negotiate regarding quantum. If there is no response within this time, the claim will exit the protocol.3

If quantum cannot be agreed at stage 2, then the claim will proceed to stage 3. Interim payments of any amount offered by the Defendant will be paid along with costs. The fixed costs allowed for a claim that reaches this stage of the process is £800.

Stage 3 – quantum

If quantum cannot be agreed, an application will be made to the Court. A paper or oral hearing will then be allocated. Each party must put forward a final offer in a sealed envelope for the judge to consider after reaching a final decision. If the Claimant is awarded less in the way of damages than the Defendant’s offer, then the Claimant must pay the Defendant’s fixed costs of the final hearing.

The costs of the hearings are fixed at either £250 plus VAT for the paper hearing or £500 plus VAT (including counsel’s fees) for an oral hearing. If settlement between the parties is reached before the hearing date, then costs of £250 plus VAT will be recoverable.

The agreed damages and fixed cost should be paid within 10 days. This stage is concerned with the Court assessing the damages or approving a settlement that has been reached.

The Future

There is no doubt that at first sight the procedure seems complicated and unwieldy, but getting to grips with the new process is vital for anyone thinking about dealing with RTA claims. The low- value RTA claims make up about 70% of all personal injury claims, and it is likely that further extensions of the protocol to other types of claims will happen over the coming years.

1Public liability claims usually involve injury and damage caused by a business. If these happen in, say, your place of work, then they are likely to be covered by the protocol as claims against an employer. If you are injured by a business’s employees or on business premises, then this is likely to be a public liability claim.

2A version of the form is also sent to the Defendant by first class post.

3Where a claim exits the protocol, then a normal PI claim process will start, but this will potentially attract higher legal costs, so it is likely that the Defendant’s insurers will want to avoid this. The amount of costs will depend on what stage the claim reaches in the litigation process.