The RTA Streamline Process: 18 months on
It’s been 18 months since the RTA Streamline Process was introduced at the end of April 2010. Now seems like the perfect to time ask whether has been a success or not. Of course, the answer to this question is yes and no!
The RTA PI scheme was initially set up to cover RTA PI claims worth between £1000 and £10,000. The caveat on this being that hire and vehicle damage are not included in this sum and are therefore, no longer cost bearing.
The claims process is supported by a Portal application, once the claim is submitted the respective defendant insurers has 15 working days to consider whether they are to accept liability and grant indemnity or not. If accepted, stage one costs of £400 plus VAT are released within 10 working days.
If the claim is rejected at stage one, the defendant insurers will have three months from the date of submission to investigate matters their end. The claim itself falls out of the Streamline Process and back in the realms of the PFR. Ideally, the defendant insurers will confirm at this stage which office is dealing with the claim, however, in reality this is rarely the case.
With stage one complete (one way or the other) medical evidence is obtained and submitted to the defendant insurers once the claim is in a position to settle (ie recovery is complete or the claimant is happy with the prognosis period). It is for the claimant to make an offer of settlement at this stage. However, there is no provision for obtaining further medical evidence at this point, if a report is disclosed via the portal an offer of settlement has to be made. The alternative – which flies in the face of Streamline Process is to send (post / fax / email) the medical report without an offer but with the nomination that a further medical report is obtained. There is no facility within the process for this, and you are left very much in the lurch as to whether the defendant insurers acknowledge the report and its findings.
Assuming the claim is ready to settle, an offer is made and when accepted by the defendant insurers damages are released within 15 working days along with stage two costs of £800 plus VAT, £150 plus VAT for the success fee (if applicable) and a further £150 plus VAT for London Weighting (also if applicable). Whilst there is no provision for medical agencies to submit the invoices under the MRO there have been no complaints in respect of this issue.
If the claimant’s offer is not accepted (and the defendant’s counter offer is also unacceptable) the defendant insurers must pay the full amount of its offer by way of an interim payment along with the stage two fixed costs plus any success fee.
The matter then proceeds to a quantum hearing where the claimant and defendant make a final offer to settle, the offer is sealed and sent to a Judge to consider. (The normal rules of Part 36 apply here). The exercise at this stage is a paper hearing and attracts further costs of £250 (escalated to £500 in the unlikely event of an oral hearing).
As you can see the benefits of litigation are greatly reduced.
It seems odd to consider one of the objectives of the Streamline Process was to further regulate the Claimant’s costs and to bring them in line with the damages awarded. Under the new process the Claimant’s costs (which are now fixed) are greater than costs paid under the old cost structure where damages do not exceed £2000.
The stats will show that the average life of a claim within the Streamline Process is three months, compared to 12 months for non streamline matters.
Complaints have been made on both sides of the fence citing abuse of process, however, from a Claimant perspective the defendant insurers are using one of the many loopholes to extend the consideration of a new claim citing a review under Article 75. To further aggravate matters, the same insurers that ignored Letters of Claim, still ignore claims notification through the Portal, and then continue to ignore subsequent letters and telephone calls.
Where to now? The claims process will shortly be expanded to cover low value EL/PL claims, and I suspect there will be a review of the fixed costs entitlement following the recommendation of a unilateral ban on referral fees.
Justice secretary Ken Clarke has laid amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill that will be debated this month. They allow the Lord Chancellor to ban referral fees in other areas of practice by regulation. The draft rules require regulators – specifically the Law Society, Bar Council, Claims Management Regulator and Financial Services Authority (reserving the power to add others) – to monitor and enforce the restrictions imposed.
It is expected that any changes would be pushed through for the start of the next financial year and that knock on effect concerning a suspected reduction in fixed costs either six or 12 months after that.