Mad rush

30 April 2010 sees the introduction of the new RTA regime, the largest change to procedure, damages and costs since the introduction of the CPR itself. The new rules follow a couple of years of consultations with stakeholders and a mediated agreement which left many claimant practitioners staggered at what had been agreed by their representatives, with some even considering judicial review '“ such is the anger at this new 'agreed' regime.

The starting point for such claims is no longer the letter of claim, but an online form completed through the 'RTA portal' on what has to be the most user-scary site possible (see the 'Personal Injury Focus' published with this issue of Solicitors Journal). What started out as a proposed one-page document is now a myriad of information submitted online with a hard copy of the now 17-page document to be posted first class to defendant insurers.

To keep within the regime, the defendant insurers should admit liability within 15 business days to start the day after it was submitted. The first claims submitted will give insurers until the 21 May 2010 to respond. This timescale is likely to be impossible for many insurers who are taking far longer to even acknowledge receipt of a letter of claim; and this time limit is the biggest chance that the case will fall out of the regime.

Assuming the insurers do respond within this time admitting liability then a 'stage 1' payment of £400 must be paid within ten business days of such a response, aiding solicitors' cash flow. Further payments will come at stages 2 and 3. One pitfall and no doubt object of part 8 proceedings to come will be late payment of staged payments and the claim therefore exiting the regime. While common sense would dictate that as soon as payment is late the regime ends, it is unclear as the new practice direction at 6.19 provides that the claimant must give written notice of it exiting the regime within ten business days otherwise it does not exit. What then for cheques received within this period? From experience of the so-called cost wars, there is tremendous opportunity for satellite litigation for years to come if the 2003 predictive cost regime is anything to go by.

Dangerous settlements

Because of the low-level costs, many firms will seek to fast-track cases to settlement as swiftly as possible with an emphasis on unqualified staff dealing under supervision. While quick settlement sounds great, it raises many problems in itself as medical experts instructed too soon often give a prognosis that is simply not accurate or they miss complications that have not yet become apparent. There will be pressure on many firms to settle at the first opportunity, leading to under settlement of cases. There is also the assumption that medical records are not necessary unless requested by the expert, which makes it much more difficult for an expert to give a tailored opinion. The temptation for firms will be simply to save the time and expense of obtaining such records to speed up the process. For those claimants wishing to wait until the expiry period of the expert's prognosis, the claimant solicitors will not get paid anything extra which will lead to many firms wishing to avoid this in favour of delivering speedy but often poor settlements as a result. The winner is the insurer and the loser is the injured victim.

For cases capable of settlement if the defendant insurers are slow to react and do not respond within 16 business days of the submission of the claimant's settlement pack, then the case falls out of the regime and the prudent solicitor will then immediately issue the usual part 7 proceedings and be safe in the knowledge of standard basis costs to fund a comprehensive well put case.

A fair hearing?

If there is no agreement within stage 2, then the case proceeds to stage 3 with a simplistic part 8 application leading to a paper hearing or, if requested, an oral hearing limited to submissions only. While those in favour of the regime will point out that in practice many courts now operate a paper hearing under the title of disposal hearings, at least such hearings focus around the witness statement. Currently, the victim can put across the effect the accident has had upon his or her life. This replacement of witness statements with a medical report attached for the simple tick-box medical report will make it impossible for each case to be decided upon its own merits.

The insurers have their wish, a dumbing down of litigation to the tick-box form with an emphasis on speed and low cost to the detriment of the innocent victim. How the insurers sold this to claimant representatives who agreed to the regime is, and will remain, a mystery as claimant representatives are bound by a gagging order of what was discussed and why this was ever agreed.