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IMPORTANT CHANGES TO NOTIFYING NEW MOTOR VEHICLE ACCIDENTS

The Ministry of Justice recently confirmed that changes will apply to claims resulting from accidents which happen on or after Friday 30th April 2010, and to ensure that you are aware of the changes and what they mean, we are providing the following information which we hope will be of assistance.

Do the reforms apply to all claims?

No. The proposals focus solely on the following motor personal injury claims:-

• Claims with a personal injury element valued between £1,000 and £10,000
• Accident occurs in England or Wales on or after Friday 30 April 2010

Other motor personal injury claims are exempt, including -

• Claims with a personal injury element under £1,000
• Claims involving employers' liability and/or public liability
• Motor Insurers Bureau (MIB) Untraced Drivers Agreement cases
• Claims where the claimant or defendant is deceased
• Claims where the claimant is bankrupt

What are the objectives of the reforms?

The aim is to encourage early notification of claims, promote early liability decisions, and to ensure there's a process to deliver fair compensation to the claimant as soon as possible in the most cost effective way.

Key objectives -

• Speeding up the claims process by fixing timelines for the agreement of liability and the value of any third party injuries
• Reducing legal costs and administrative expenses
• Introducing fixed response times and changes to the current fixed legal costs
• Introducing an electronic industry portal to be used by insurers, claimant lawyers and compensators, to enable the swift electronic exchange of all relevant claims information during the lifecycle of the claim

What are the key changes and what do they mean for our clients?

The new process is important, not only in terms of reducing the costs insurers incur when settling personal injury claims, but also in providing an improved process for claimants.

This scheme will mean that everyone knows in advance what the process and the fixed costs will be at the various stages.

Under the new system claimant lawyers will notify the defendant insurer of a claim via an industry portal, and the insurer will be given 15 days to respond on liability.

However if as a client, your insurer receives the notification from the claimant lawyer before you have notified us or your insurer of a claim, then they will have less opportunity to agree liability in the 15 day period.

That's why early notification of claims is therefore absolutely key, as this will insurers to make a decision on liability within the 15 days.

The new process is split into three stages -

Stage 1

The claimant solicitor completes the claim notification form and sends it to the defendant insurer via the industry portal. The insurer has 15 days to respond on liability.

Stage 2

If liability is admitted, the claimant obtains a medical report and the process continue with offers and negotiations of a settlement to a strict timetable

Stage 3

If the parties cannot agree a settlement, an application is made to court for a quantum hearing.

If a claim drops out of the Ministry of Justice process, it will be dealt with in the same way it is today. The claimant would not benefit from the new process in terms of speed of settlement, and the insurers' costs would be higher than if it had been handled within the new process. All of which directly can impact our client's claims history and renewal premium - something we all actively want to avoid.

Should you have any queries regarding the new claims process then please do not hesitate to contact us.