The new personal injury claims process for road traffic accidents (RTAs) came into effect in England and Wales at the end of last month.
As of April 30th 2010, the new rules governing claims of this nature were implemented, having been announced by the Ministry of Justice (MoJ) back in September 2009. It signals a major change for insurers and claimants alike, particularly given that as many as half a million individuals will be affected by the new process.What does the reform of RTA personal injury claims mean?
Under the new system, insurers are required to respond to claims for between £1,000 and £10,000 - which constitute almost 80 per cent of all motor personal injury claims - within 15 working days of the incident being reported to them. This is a significant change from the previous process, in which insurers had up to three months to accept or deny liability. It means that the overall time for an RTA personal injury claim to be settled should drop from two years to a maximum of just nine months.
Each case will now be dealt with through three separate stages, the first of which will involve the collation of all relevant information in order for the claim to be submitted. It will be sent electronically to the defendant's insurer, which will have 15 business days to respond. The only exemption to this ruling is for the Motor Insurers' Bureau, which will be given twice as long to reply to a claim. If liability is admitted at this point, fixed recoverable costs of £400 will be applied, as well as a 12.5 per cent success fee - although this will only be charged at the end of the next stage if the case settles.
A medical report will be obtained by the claimant solicitor if an admission of liability is made following the first stage of the process. A second report may also be gathered from a medical specialist in the relevant field if it is deemed necessary. Based on this medical evidence, the insurer is then given 15 days to accept the compensation offer, or to make a counter-offer in which case a further 20 days will be allowed for negotiation between the two parties.
The final stage of the process will then be entered into in the event that an agreement cannot be reached on the value of the claim.
As well as tasking insurers with deciding on liability in 15 days, the new system will also aim to speed up the process by standardising claims forms, which will reduce the amount of duplicated information. Legal costs will also be fixed in a bid to cut down on previously high bills, which force all drivers to pay an extra ten per cent on their motor premiums.
In order to support the new, quicker claims process, an online portal has been created to allow for the fast exchange of information related to each individual claim. It will be used to manage communications between the insurer and the representative of the claimant and can also ensure that all necessary details have been filled in at each stage. Furthermore, the timeframes in which each party must respond will be monitored and although it is not governed by regulatory compliance, failure to meet reply in time could carry potential financial penalties.