PI Focus | Widening the net

The Ministry of Justice (MOJ) have announced the extension of the RTA portal vertically to include RTA claims up to 25,000, and horizontally to encompass employers' liability (EL) and public liability (PL) claims up to 25,000. The consensus is the portal currently works very well for low-value, straightforward claims; but its expansion to incorporate a much wider variety of claims draws into question the suitability of such a model to fairly and effectively deal with complex and serious issues.

At the time of writing, the final version of the protocol has not been released but a draft has been circulated which provides insight into how it's envisaged such claims will work. This article will outline the process; consider the arguments put forward about how such claims will work and the issues this new system will raise.

The MOJ were keen for all changes to be implemented in line with the wider reforms to civil funding on 1 April 2013; meaning the new system would apply to any accident happening after this date, or in a disease claim where a letter of claim had not been sent. However, it is now envisaged the new system, when finalised, will apply to any accident happening after the end of July 2013.

Portal procedure Claims will be processed in much the same way they are currently for RTAs below 10,000. For those less familiar, here is a brief summary of the different stages of the portal process.

First, there will be a number of claims excluded, despite the wide definition of 'employers' and 'public' liability in the draft, including:

• fatal claims;

• claims involving a protected party;

• where the defendant in a PL claim is an individual;

• where the defendant is insolvent or there's no identifiable insurer;

• claims involving multiple defendants,

• mesothelioma claims; and

• PI claims arising from a breach of duty occurring outside England and Wales.

Stage 1 - If not excluded, a claims notification form (CNF) will be be sent to the defendant's insurer, if known, or if it's not the claimant must make a reasonable attempt to identify the insurer and in an EL case must have carried out an Employers Liability Tracing Office (ELTO) database search.

The defendant must acknowledge receipt of the CNF the day after it's received, and formally respond within 30 business days for an EL claim and within 40 business days for a PL claim. The process of the claim from here will depend on the issues that arise and the stance of the parties. If there's an admission of liability, the claim can continue within the portal and move onto stage 2; but if liability is denied or there are allegations of contributory negligence, it will drop out of the portal into the fast track.

Stage 2 - If the claim proceeds to stage 2, medical reports will be obtained and quantum details provided. In cases worth more than 10,000 additional advice from a specialist solicitor/counsel may be sought and there are provisions for interim payments to be obtained.

A settlement pack with this information is forwarded to the defendant who then has 35 days to consider and make an offer.

If a settlement cannot be reached, then a Court Proceedings Pack is finalised between the parties and sent for either an oral or paper hearing.

The legal costs paid to the claimant's legal representatives will depend at which stage the case concludes, and is summarised below (although London firms will receive 12.5 per cent uplift).

Practical issuesFirst, an issue with which many disease lawyers will be familiar is the tracing of an insurance policy. With RTA claims, an injured person can obtain information from the at fault driver, or refer to the motor insurance database. While there are methods available to trace EL/PL policies, such as an ELTO search, these do not usually produce an instant result and insurance searches can take a great deal of time.

Second, the period for a defendant to formally respond is 30 days for an EL claim, and 40 days for a PL claim which is a much less than the three month period (plus 21 days for acknowledgment) currently afforded under the pre-action protocol. The issues regarding breach of duty, causation and possibly limitation which may arise in an EL/PL case are often more complex than that of a straightforward RTA, and it may be this period is not sufficient for a defendant to undertake all necessary investigations.Third, the fixed costs in the portal will be a concern to claimant solicitors. A fixed recoverable cost regime must accurately reflect the amount of work undertaken. A claimant solicitor who runs a case worth 25,000 to a final oral hearing will receive costs of 2,100; approximately ten hours of Grade B fee earner time. Any claimant solicitor will agree that this does not adequately reflect the time that goes into a claim worth 25,000. A discussion about the viability of this work for claimant solicitors will be discussed below.

Fourth, the changes signal an adjustment to the defendant's role on a practical level. At present, the claimant solicitor liaises with the client and builds a case; the defendant's work usually only begins once presented with a case. With the expansion of the portal, there will be a vast reduction in the number of claimant solicitors able to undertake this work which may result in an increase of litigants in person. With this, a defendant's role will change and they will have to liaise directly with more litigants and undertake work that previously would have been done by the claimant solicitor.

The position of claimant and defendant lawyers is sharply polarised with each having strong views on what these changes will mean and the implications on the personal injury sector. Claimant solicitors do not consider the portal framework suitable to encompass claims up to 25,000 which inherently involve serious injuries and complex issues. Defendants' overall welcome the certainty created by a fixed cost regime, with some indicating the changes don't go far enough.

A key concern relates to access to justice for injured persons. Due to the nature of the fixed recoverable costs, many solicitors will be unable to offer these services as they are no longer commercially viable, meaning injured persons will not have the same choice of independent legal representatives.

This is likely to result in claimants representing themselves and will create an inequality of arms between the injured persons and the insurers. Or, where legal advice is sought, this will inevitably be from a less qualified fee earner with minimal supervision. The Civil Justice Council (CJC) state there should be a larger margin within the fixed recoverable costs proposed to enable adequate supervision of lower grade fee earners. (see CJC's response to Extension of the RTA PI scheme: Proposals on fixed recoverable costs)

Dealing with litigants in person is likely to see claims undervalued and settled early, as they may not know what their claim is worth and be intimidated by the whole process. If they are offered 15,000 early on a claim that we might judge to be worth 25,000, it is going to affect justice, yet see huge potential cost savings for insurers which are unlikely to be passed on to policy holders via lower premiums.

The CJC acknowledge the distinction between cases below and above 10,000 is sensible and justified in the determination of fixed costs, but also note the question of whether liability is admitted is of equal importance. The cost of running a legal claim is not only contingent on the value but also the amount of investigations and stance of the parties; whether liability is contested should be a consideration in the fixed costs of claims which will fall out the portal.

Whether the portal is ready for such a revolution is questionable. Professor Fenn, an expert on the portal who has reported for the government, has raised this and it remains to be seen whether the portal will cope with the strain of this rapid expansion not in contemplation at its conception only a few years ago.

The changes have been opposed by APIL launching a judicial review, and the Law Society making a FoI request for full disclosure of Professor Fenn's report - the document on which the MOJ based the fixed costs which are proposed. Surely if the government is wishing to push forward such far reaching changes, it should disclose the basis on which those proposals are being made, as refusal merely compounds a feeling that the government's proposals are not based on facts. Where will this expansion end? There is talk of a mesothelioma portal, which has been met with vehement opposition. However, judging by the MOJs stance, there may be more to come