S-Tech news
MOTOR INJURY CLAIMS – THE CHANGES
18/05/2010
Injury claims following Motor Accidents have risen dramatically over the last 5 years. Increasingly what may seem like a minor incident is resulting in a third party pursuing you for their injuries. These minor incidents are costing Insurers millions of pounds, particularly in Solicitors’ fees. The Association of British Insurers found that, on average, legal costs added £0.88 to every £1.00 paid in compensation. More often than not the Solicitors’ fees are actually higher than the compensation paid to the claimant.
To try and put an end to these escalating Solicitors’ costs The Ministry of Justice has stepped in with a new process for Road Traffic Accident (RTA) Injuries of between £1,000 - £10,000.
The idea is to streamline the procedures for submitting a claim therefore cutting down the time taken to agree liability and negotiate compensation with a fixed cost structure for Solicitor’s fees.
To prevent delays caused by Policyholders not sending in Solicitors’ letters the Injury claims will now be reported direct to the relevant Insurer via a web based portal. The Insurer will be traced using the vehicle’s registration number therefore you may not be aware that a claim is forthcoming until your Insurers alert you.
Hopefully these changes will result in lower claims costs and perhaps less incentive for some Solicitors to take on so many minor injury claims. The main concern about these changes however is the limited time Insurers have to give their initial view on liability. If no response is given Insurers face additional charges from Solicitors. Insurers only have 15 days to respond to the first notification from the Solicitor. It is therefore very important that policyholders have either already notified us of the accident or we can obtain their version of events promptly.
We recommend that our policyholders report all accidents involving another party regardless of who was at fault, the level of damage or if injuries are apparent. This has always been a Policy Condition under most Motor Insurance policies but it is now more important than ever.
If the accident has already been reported then Insurers will be better equipped to respond to any injury claim that may be received. Reporting claims early also gives your Insurers the opportunity to assist third parties with their damage and provide an alternative vehicle. This cuts down on increased vehicle repair and credit hire costs.
What can Policyholders do?
• Ensure that you are fully aware of claims reporting procedures. Educate the drivers using your vehicle/s on the importance of reporting all accidents. S-Tech can assist with writing an accident guide for drivers or fleet managers upon request.
• Take photographs at the scene and write a detailed statement and diagram while the accident is fresh in the driver’s mind.
• Ensure that we are advised of all vehicle changes immediately as Solicitors will be checking your Insurance details and submitting the claim direct to Insurers online. The Motor Insurers Database (M.I.D.) must therefore be up to date.
A three stage process has been outlined as follows and applies to Road Traffic Accidents in England and Wales from 30th April 2010 with a personal injury element of at least £1,000 but less than £10,000
• Stage 1 – Notification, investigation and admission/denial of liability
The claimant’s solicitors no longer need to send a letter to the person involved in the accident. The Solicitors will notify the Insurers via a Notification form being sent via the internet ‘Personal Injury Portal’.
Insurers only have 15 days to admit liability, deny liability or allege contributory negligence.
Stage 1 Fixed Cost: £400 + 12.5% success fee
• Stage 2 – Medical evidence, offers to settle and negotiation
If Liability has been admitted then the claim moves onto stage 2 where the claimant’s solicitors must supply independent medical evidence to support the injury. This is to be supplied along with their schedule of special damages and offer for settlement. The Insurer has 15 days to consider the offer. If the offer is being rejected then a further 20 days is allowed for the two parties to negotiate.
Stage 2 Fixed Cost: £800 + 12.5% success fee
• Stage 3 – If quantum cannot be agreed
If settlement cannot be agreed on quantum at stage 2 then application can be made for the claim to be assessed by the court by either a written or an oral hearing.
Stage 3 Fixed Cost: £250 for a paper hearing, £500 for an oral hearing, with success fee of 100% where the claimant succeeds. Costs are paid by the losing party.