Donna Scully featured in the UK Motor Claims and Body Repair Report 2024

19 November 2024

Our Owner & Director, Donna Scully, shared with Trend Tracker the pressing need for rule changes to expedite the civil justice process and ensure fair compensation for claimants.

It is of course completely understandable that the focus of the new incumbents at the Ministry of Justice (MOJ) is the criminal justice system, with the backlog of criminal trials and the shortage of prison spaces.

While those issues are rightly prioritised, it remains important that consumers of civil justice are not neglected, and that work continues to ensure that timely and efficient outcomes are achieved.

The Chancellor has drummed home the message that public funds are extremely tight, so it is important that stakeholders in the motor claims process can work together to create solutions and improvements that are not only easy to implement, but do not come with a big price tag. There are some fairly simple changes to the rules that will encourage settlement, reducing the pressure on the Court Service, and ensure that consumers are properly compensated.

Court Delays

The latest HMCTS data shows the average wait for a small claims hearing remains a shade under 12 months. This will be from the date of issue, which can be weeks or months after the papers are sent to court.

It feels archaic that in most cases we are still required to print bundles of court papers and send them in post to the issue centre, in the hope they are safely received and that we will receive a notice of issue at some point in the future.

There is a welcome focus on digitising the court process, but the benefits are undermined where the parties have to wait months for a notice of issue, and more than a year for a hearing date.

We at Carpenters are spending significant sums on embedding AI into our claims system. The benefits of those improvements will be hugely reduced on litigated claims that then get stuck in a log jammed court process.

The delays in the court process have an impact far beyond individual litigants. Insurance premiums for example remain unnecessarily increased. Liability hearings are generally listed after the parties’ policy renewal dates. While liability is outstanding, renewal premiums are increased – and this can span more than one renewal cycle. Similarly, until the liability issue is resolved at court, insurers are forced to maintain reserves that may be inflated.

Reducing Delays

One obvious mechanism for improving the process without significant cost, is to update the Rules, Pre-Action Protocols and Practice Directions. The focus must be on ensuring that the rules encourage settlement. This will reduce the need for litigation, which will improve the demands on the Court Service and benefit all users. The courts will then be able to focus on claims that genuinely need to litigate.

There are a number of quick wins at minimal cost to the MOJ.

A small number of insurers make tariff offers below the appropriate bracket. This is not permitted under the rules, but there is no sanction so the offers are made. The result is that we are required to issue proceedings on low value claims that could easily have been settled, adding more work into an already stretched court process.

The rules should be changed for litigants who adopt these tactics – both claimants and defendants - perhaps applying penalty costs to a party that does not follow the tariff.

We are also seeing an increasing number of cases where the court rules mean that injured claimants are losing out on compensation.

Advocacy Fees

The small claims injury limit of £5000 captures claims that are far from straightforward. They can involve liability disputes requiring the cross-examination of witnesses, legal arguments, and medical issues with multiple medical reports. The sums at stake are material for almost all claimants.

These claims need to be dealt with by experienced lawyers. The suggestion that “small” injury claims are simple, and do not need legal representation, is just wrong - demonstrated by the fact that insurers always instruct a barrister to represent them.

Where the claimant is forced to go to court, the cost of instructing a barrister to argue the case is not payable by the at-fault insurer – even where the claim is successful. Successful claimants should not have to bear the additional cost of having the same representation as the insurer.

The inability to recover advocacy fees adversely impacts the claims process, and consumers, in a number of ways:

Claims do not settle. Insurers assume that claimants cannot afford to go to court, or do not want to incur the irrecoverable cost, and so make low offers that prolong the claim.
Under-compensation. The irrecoverable cost of arguing the claim means the claimant is often forced to accept a low offer, and is under-compensated.
Inequality of arms. The options for the claimant are to be unrepresented, to instruct a non-qualified advocate (to reduce cost), or to pay a fee that reflects the insurer’s level of representation.

The restriction on recoverability needs to be removed urgently, to ensure proper compensation, remove the insurer windfall, and ensure “equality of arms” at court hearings.

This change would also reduce litigation – more cases will settle as insurers seek to avoid the increase costs of litigation.

Medical Disbursements

The rules also limit the amount recoverable for experts’ fees, to £750. There are many types of medical report where the cost significantly exceeds that sum. Psych reports are above that level, and fees quickly escalate for the likes of ENT and Neurology reports, or where the medical records are extensive.

The fees are per expert, not per report, so if an addendum is required that fee is not recoverable.

Where a psych, ENT or Neurology report is recommended, for example, the financial cap puts injured consumers at risk of not recovering an expense required to achieve proper compensation.

Consumers lose out

Claimants are in an impossible position:

Without the report, damages for the injury will not be recovered, and it is not possible to confirm the impact of the injury and treatment required.
Obtaining the report, on the other hand, risks the claimant incurring hundreds and potentially thousands of pounds that will not be recovered.
The claimant is stuck between a rock and a hard place, and will often end up under-settling to avoid the irrecoverable cost of the report.

Cost to the NHS

An additional consequence of the current cap is that the cost of investigating the injury, and any required treatment, moves from the at-fault insurer to the NHS. It is wrong that the NHS should pay, to the benefit of the at-fault insurer.

The only winner is the at-fault insurer, who avoids the cost of a reasonably incurred report, and the associated damages for injury and treatment costs.

The recent consultation on medical reporting fees (the response to which was due in January but which is still awaited) did not cover fees on the small claims track. We need an urgent review of the rules, and a realistic increase of the amount recoverable in respect of medical reports, to ensure that innocent claimants are able to properly evidence the injuries sustained, and that appropriate damages can be recovered from the at-fault insurer.