As a result of widespread advertising by claims management companies, you are probably aware that you can receive compensation for injuries that were not your fault. However, you may not be aware of the protocols you must follow when bringing such claims.
In particular, there are specific pre-action protocols for low-value personal injury claims arising from road-traffic accidents (“the RTA protocol”), as well as those against your employer and public bodies (“the EL/PL protocol”). However, recently, the government has made various changes to the fixed legal costs for such claims.
The protocols help both to make sure that simple, low-value cases are dealt with in the most efficient way, and to avoid spiralling legal costs. Both protocols state that they aim to avoid the need for the claimant to start formal proceedings, ensure that “damages are paid within a reasonable time” and “the claimant’s legal representative receives the fixed costs at each appropriate stage”.
As of 31 July 2013, all claims for £25,000 or less must follow the protocols (the threshold was previously £10,000). There are three stages to each protocol, and there are fixed legal costs associated with each stage.
At stage one, the claimant sends a completed claim notification form to the defendant and their insurer, and should receive a response within 15 days (car insurers), 30 days (employers), or 40 days (public bodies). If the defendant admits liability, the claim will generally continue to stage two, but if the defendant denies liability, the claim will exit the protocol.
At stage two, the claimant sends a “settlement pack” to the defendant, including any medical reports and witness statements, giving the defendant 35 days to consider the claim and make an offer of settlement. The claimant can also request an interim payment at this stage. If the parties cannot agree a settlement at stage two, the claim will progress to stage three, where a court will make a decision.
If the defendant admits liability at stage one, he will pay the fixed costs associated that stage. Similarly, the defendant will pay the fixed costs associated with stage two, since liability must be admitted for claims to reach that stage. Therefore, the costs for stages one and two should be included in any settlement figure.
If the claim reaches stage three, the defendant will only pay costs associated with that stage if the claimant is awarded an amount greater than any offer made by the defendant at stage two. If the award is equal or less than any offer, the claimant will pay the stage three costs. This prevents the claimant from unnecessarily refusing the defendant’s offers at stage two.
In April 2013, the government lowered the fixed costs payable for claims under £10,000 from £400 to £200 at stage one, and from £800 to £300 at stage two. Claims brought on or after 31 July 2013 with a value of between £10,000 and £25,000 must also now follow the protocols. The costs for these claims are fixed at £200 for stage one, and £600 for stage two. The maximum costs at stage three for any claim are £500 (or £650 if the claimant is a child).