Reshaping the claims regime

The consultation paper focused on whether there should be changes to the small claims track limit for personal injury and housing disrepair claims and discussed the fast track limit. It set out proposals for streamlining the claims process for personal injury claims, which, if adopted, the Ministry of Justice suggested would create a more timely, proportionate and cost-effective process.

A major consideration of the consultation was whether the small claims limit for personal injury and housing disrepair claims should rise from £1,000 to £5,000. While it was recognised that costs in lower value claims are often the most disproportionate, the government felt that reform is served best by changing the claims process.

The claimant lobby will claim victory if the small claims limit remains at £1,000 (while the fast track limit is raised to £25,000). Insurers should be happy for the small claims limit to remain at its current level if the proposed changes to the claims process are fully implemented, as this will do more to curb escalating claims costs than changing the limit.

The second part of the paper dealt with the claims process reforms for injury and disease claims. The changes recommended focused on avoiding delays, promoting the sharing of information and avoiding duplication by limiting the steps required in each case. Fixed costs would also apply to various stages of a claim.

The move was seen as introducing greater control over pre-action conduct and limiting the work undertaken at this early stage. The proposal's main thrust was to accelerate the claims process with time limits imposed, including early notification by the claimant's solicitor, early admissions (15 days for motor claims and 30 days for EL and PL) and early settlement for claims under the fast-track limit.

Brokers should regard the tighter deadlines as an opportunity to reshape the way they handle claims; even simple tasks will become time sensitive. Of paramount importance will be ensuring that information passing between the insurer and insured is well facilitated, with electronic communication, desktop claims and reports being among the solutions.

Hopefully, criticism that the consultation was short on detail in places will be rectified by the MoJ in the detail it provides in its response, which is due by 13 October.

Claire Larnder, Associate, strategic litigation unit, Beachcroft LLP.