Magazine article Public Finance

Moving into Injury Time

Magazine article Public Finance

Moving into Injury Time

Article excerpt

Reform of the personal injury claims system is long overdue. So too is the outcome of the Ministry of Justice's consultation on its plans for change, Case track limits and the claims process for personal injury claims.

Published in April 2007, the consultation was due to end last July. The long wait for a ministerial response since then has caused a degree of unrest, with calls for clarification and action from some quarters.

Last year's announcement marked a much-needed shake-up of how personal injury claims were handled. The subsequent paper's main recommendations sought to tackle head on issues such as the length of time taken to resolve claims and the disproportionately high costs of relatively low-value claims.

The Association of British Insurers has published some statistics, sourced from the then Department for Constitutional Affairs, which show that on average for every £1 spent on compensation, 43p is spent on legal costs.

For claims less than £5,000 in value, for every £1 in personal injury compensation, claimant lawyers receive an additional 88p for motor claims, and 93p for casualty claims.

Zurich worked with the government and others to help shape the proposals. Our response to the paper accepts the need to accelerate the claims process yet calls for compromise where legitimate concern exists.

We challenged the proposal for a decision on liability to be made within 30 working days (60 calendar days) for all casualty cases, failing which the case would fall outside the fixedfee process. This was based on our experience of handling complex casualty claims in the public sector, some of which are not suitable for this fast-track model. We are acutely aware of the resource demands placed on the sector and fear a situation where some organisations might not have the administrative infrastructure to meet these timescales.

The 30-day limit is seen as one of the paper's key recommendations, and is arguably the one with the biggest impact for local authorities. The current timescale is 90 calendar days (60 working days). Unless both insurers and customers re-engineer their internal processes, the chances of hitting the new deadline are slim.

Document storage, retrieval and transmission all need to be reassessed, with electronic and email solutions becoming the method of choice. …

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