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Health Legal Update: Jackson - Briefing Note on changes to EL/PL process

  • United Kingdom
  • Health and life sciences - Healthcare e-briefings

04-06-2013

1. What is changing?

Following the first wave of Jackson reforms, the new EL/PL protocol will be introduced on 31 July 2013 as part of a package of measures designed to reduce legal costs in personal injury claims. It will apply to personal injury claims, and certain disease claims, where damages are valued up to £25,000.00, arising from accidents occurring after 1 August 2013. The changes will be administered through an electronic portal, which is an extension of the current Road Traffic portal.

Clinical negligence claims are excluded form the portal along with:

  • Public Liability Disease claims;
  • Public Liability cases where the Defendant is an individual;
  • Cases where a Defendant is insolvent;
  • Disease cases where there is more than one Defendant;
  • Cases involving Mesothelioma; and
  • Cases where there is harm, abuse or neglect of a child or vulnerable person.

2. Changes to be introduced by the Portal

Cases will be managed in two stages:

Stage 1

  • Claims Notification Form (CNF); A claim under the portal will be commenced by the Claimant's solicitors sending a CNF to the Defendant, and their insurer, electronically (the portal must therefore, be checked daily).
  • Acknowledgement; An acknowledgement is due the next day, against electronically. Currently the time period for acknowledgement is 21 days.
  • Liability must then be admitted or denied within the following time scales:
    • EL claims – 30 business days (6 weeks) from deemed service of CNF; and
    • PL claims – 40 business days (8 weeks) from deemed service of CNF.
    • Both are currently 3 months.
  • Earnings Information; In an EL claim, a Defendant must provide earnings information to the Claimant to enable them to quantify the claim fully within 20 days of any admission.

Stage 2

  • Settlement;
    • Once an admission of liability is made, the claimant solicitor will obtain a medical report. There is no fixed timetable for obtaining the medical report.
    • The claimant solicitor will then complete the Stage 2 Settlement Pack form which will be sent electronically to the Defendant, together with the medical report and any receipts/evidence of special damages claimed.
    • The Defendant has 15 business days from receipt of the Stage 2 Settlement Pack to consider and either accept the claimant's offer or make a counter offer.
    • Where the Defendant makes a counter offer, there will be a further 20 business days for consideration and negotiation between the parties. The total consideration period for Stage 2 Settlement Packs is 35 days.
  • Proceedings; Where agreement on quantum has not been reached at the end of the 35-day total consideration period, the claimant solicitor will prepare the Stage 3 Court Pack for a hearing to determine quantum.

3. Cases Falling Outside Portal

If there are any allegations of contributory negligence, liability is denied, or there is non compliance with deadlines set out in Stages 1 and 2, the case will fall out of the portal.

It is anticipated that many of the disease cases will fall out of the portal at an early stage. Currently, the information supplied in the Letter of Claim is very often insufficient to investigate the matter adequately. Under paragraph 6.14(4) a matter will come out of the portal if inadequate mandatory information is provided in the CNF. Many will also be excluded as they often have more than one Defendant.

Such cases will follow the current processes. They will however, be subject to a Fixed Costs Regime (FRC) (see below) and the new Jackson reforms which have a clear focus on reducing overall costs.

4. Proposed Costs under the new protocol

These have not been confirmed, however, the suggestion is as follows:

  • Damages £1,000.00 - £10,000.00:
    • Stage 1 fees - £300.00
    • Stage 2 fees - £600.00
  • Damages £10,000.00 - £25,000.00:
    • Stage 1 fees - £300.00
    • Stage 2 fees - £1,300.00

5. Proposed Fixed recoverable Costs

Where the claim falls out of portal the Claimant’s will only be entitled to recover limited costs as against the hourly rates they currently charge:

Settlement pre- issue

  • Damages £1,000.00 - £5,000.00:
    • EL & PL - £950.00 + 17.5% of the damages amount.
  • Damages £5,001.00 - £10,000.00:
    • EL - £1,855.00 + 12.5% of the amount of damages exceeding £5,000.00.
    • PL - £1,855.00 + 10% of the amount of damages exceeding £5,000.00.
  • Damages of £10,001.00 - £25,000.00:
    • EL- £2,500.00 + 10% of the amount of damages exceeding £10,000.00.
    • PL - £2,370.00 + 10% of the amount of damages exceeding £10,000.00.

Post Issue

  • Claim settles following the issue of proceedings but before the allocation:
    • EL - £2,630.00 + 20% of the damages amount
    • PL - £2,450.00 + 17.5% of the damages amount
  • Claim settles following allocation but before listing:
    • EL - £3,350.00 + 25% of the damages amount
    • PL - £3,065.00 + 22.5% of the damages amount
  • Claim settles following listing but before the trial:
    • EL - £4,280.00 + 30% of the damages amount
    • PL - £3,790.00 + 27.5% of the damages amount

Trial

Where the claim proceeds to trial the following costs apply in addition to the post issue fees:

  • £485.00 (damages up to £3000.00)
    • £690.00 (damages from £3000.00 - £10,000.00)
    • £1,035.00 (damages from £10,000.00 - £15,000.00)
    • £1,650.00 (damages £15,000 .00+)

The costs above are proposals at the moment but it is not expected that they will vary greatly in the final version.

5. Summary

The initial response period for these claims will be roughly half that of the current period. Therefore, quicker investigations of claims will be required.

The introduction of the revised protocol and portal should reduce the total cost of claims substantially both by imposing cost caps on third party costs and streamlining the processes resulting in faster resolution of claims.

The portal will however, make it more difficult to identify fraudulent claims. The onus is very much placed upon the Defendant to meet deadlines. There is a concern that there may be insufficient information within the CNF to enable a Defendant to fully investigate a claim.

6. Implications for businesses

To reap the advantages of these changes Defendants must make sure they can comply with the strict time limits that will keep claims within the portal. Efficient acknowledgement of claims and ready access to relevant documentation will be essential

Such information is likely in EL claims to be:

  • Training records;
  • HR records;
  • OH records; and
  • Earnings information.

And for both EL and PL claims:

  • Risk Assessments/Method Statements;
  • Maintenance/Inspection records.

This list is not exhaustive, and depending on the circumstances of an accident, further records may be required.

This will require good communication between departments, and with the Insurer, once a claim is received. Stringent internal deadlines must be put in place to deal with any such requests received for documentation. In larger organisations a central point for all information to be collated, before onward transmission to the insurer or claims handler, may be required.

Additionally, there must be a system in place to deal with the receipt of a CNF from Claimant’s solicitors as these will require acknowledgement within only one working day.

If organisations act early and ensure that robust and failsafe processes are put in place to ensure a timely response to claims they should benefit from a substantial reduction in the overall cost of such claims. As a more definitive date has now been provided it is time for business to start acting to prepare for these changes.

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