Kerry Underwood


with 4 comments

I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.

On 17 November 2016 the Ministry of Justice published its consultation paper – Reforming the Soft Tissue Injury (‘Whiplash’) Claims Process – a disingenuous title as it proposes a five-fold increase in the small claims limit for personal injury cases of all kinds, not just whiplash and not just road traffic.

So if a spanner falls on your head at work this consultation covers that accident, which has nothing whatsoever to do with whiplash or motor insurance premiums.

It also covers credit hire claims and the possibility of a tariff system for injuries.

The consultation is open until 5.30pm on Friday 6 January 2017, that is 50 days, including Christmas and the New Year period.

Including the impact assessment, which for once is lengthy and important, it runs to nearly 200 pages.

I have given the link above and the paper can be accessed there and responded to there.




Small Claims Limit

The consultation paper proposes increasing the small claims limit for all personal injury cases from £1,000.00 to “at least £5,000.00.” (Paragraph 66, 82 – my bold).

The Executive Summary refers to £5,000.00 but Part 4 – Raising the Small Claims Track Limit for Personal Injury Claims – (pages 24 – 30 of the report) refers to “at least £5,000.00” (paragraph 66, 82), “whether the increase should be to £5,000.00 or higher.” (Paragraph 87, 94) and paragraph 97 reads:-

“97. The level for the small claims limit for PI claims relates only to the PSLA element of the claim and not to the total value of the claim. Consistent with this, it is intended that the increase should apply only to the PSLA element of the claim. In considering the level of the increase, and to build in an element of future proofing, the government has considered whether the limit should be raised further, for example to £7,500 or even to £10,000, given that the limit for all other claims is £10,000. However, the government has decided that an increase to £5,000 is a proportionate response to the issues identified at this stage, and the accompanying impact assessment uses this figure. We would, however, welcome views from stakeholders on whether the small claims limit should be increased beyond £5,000, and, if so, to what level.”

Question 14 of the consultation, which follows paragraph 97 reads:-

“Question 14: The small claims track limit for personal injury claims has not been raised for 25 years. The limit will therefore be raised to include claims with a pain, suffering and loss of amenity element worth up to £5,000. We would, however, welcome views from stakeholders on whether, why and to what level the small claims limit for personal injury claims should be increased to beyond £5,000?”

The Government says that it is “not minded” to limit the small claims rise to RTA claims only (paragraph 93), although question 13 states:-

“Question 13: Should the small claims track limit be raised for all personal injury or limited to road traffic accident cases only?”

The Ministry of Justice state, correctly, that neither the issue of raising the personal injury small claims limit, nor the types of personal injury claim that such increase will apply to, require primary legislation, that is they can be dealt with by way of a statutory instrument amending the Civil Procedure Rules.

Paragraph 86 reads:-

“Increasing the small claims limit for PI claims does not require primary legislation and can be achieved through changes to the Civil Procedure Rules. Supporting changes will also be required to allow for the recoverability of the fixed cost of a MedCo accredited medical report by the claimant and to ensure that all claims are supported by such a medical report.”

This will involve a major change in the culture of the Small Claims Court where generally expert evidence is not allowed.

Overall the consultation paper is very confused and confusing as to whether litigants in an increased small claims limit will require assistance.
The general tone of the paper is that they do not and yet paragraph 103 reads:-

“The government is considering the issue of the potential for claims management companies (CMC) and paid McKenzie Friends21 to re-enter the PI market in response to these reforms in general, and the increase in the small claims limit in particular. These types of organisation can offer services to claimants whilst operating with lower overheads than many PI lawyers. During the last consultation on this issue, a CMC trade association wrote to the government to argue that this would happen if the small claims limit were increased. We are interested in respondents’ views in relation to whether or not this would be helpful in providing support to otherwise unrepresented litigants.”

Questions 15 and 16, grouped together in the consultation paper, read:-

“Question 15: Please provide your views on any suggested improvements that could be made to provide further help to litigants in person using the Small Claims Track.

Question 16: Do you think any specific measures should be put in place in relation to claims management companies and paid McKenzie Friends operating in the PI sector?

Please explain your reasons why.”

Thus the Government is specifically considering replacing lawyers in personal injury small claims with paid McKenzie Friends and with claims management companies.

How on earth that will reduce, rather than significantly increase, fraudulent claims is beyond me and the issue is not even raised in the consultation paper.




As any increase in the small claims limit will be dealt with by amendment to the Civil Procedure Rules, this change could be in as soon as April 2017.

On all previous occasions the key date has been when proceedings are issued.

Thus two passengers are injured in the same accident and both have claims worth £4,000.00. One claim is issued in March 2017 and thus is cost bearing and the other is issued in April 2017 and is not cost bearing.

The non-personal injury small claims limit was increased from £5,000.00 to £10,000.00 in April 2013 and that was how it was implemented.

Likewise under section 57 of the Criminal Justice and Courts Act 2015 the relevant date is when proceedings were issued and not the date of the cause of action. Any claim issued on or after 13 April 2015, whenever the accident occurred, is caught by the fundamental dishonesty provisions.

“Proceedings” under that Act means issued at court and so being in the portal process does not count.

It is likely to be the same with a small claims so that court proceedings must be issued by the end of March 2017 to avoid a sub £5,000.00 claim being allocated to the small claims track.

There is no precedent as the small claims limit for personal injury matters has not risen since 1991, before the portals existed.

It is strongly arguable that reaching Portal Stage 3 means proceedings have been issued, as indeed they have with a court fee paid.

Unfortunately the conduct of the Ministry of Justice is currently not always logical or consistent with the rule of law, and so it cannot be assumed that the rule change will provide that anything in Stage 3 is issued for the purposes of the small claims limit.

Given the 21 days plus three months’ time for a defendant to consider a claim you should aim to have everything in the portal by 30 November 2016 and ensure that you are ready to issue proceedings once the time limit is up.




The Government proposes either to remove compensation entirely for pain, suffering and loss of amenity in “minor” road traffic accident related soft tissue injury cases, or to fix such damages at £400.00, or £425.00 if there is psychological injury involved as well.
The detail appears in Part 2 – pages 15 – 19 of the paper – Reducing the number and cost of minor RTA related soft tissue injury claims, but with reference to Part 1 – Identifying the issues and defining RTA related soft tissue injuries.

The Government expresses no preference between the two options and therefore complete removal of general damages for minor soft tissue in RTA cases is still very much an option.

The Ministry of Justice expresses the view that “the level of compensation awarded to claimants is out of all proportion to the level of pain and suffering actually experienced by most people following a low speed RTA.”

I was unaware that the current Lord Chancellor, who we know is not a lawyer, is a doctor.
The paper refers to the Judicial College Guidelines and obviously the Government statement is a direct criticism of the Judiciary for setting the figures in the guidelines too high and for awarding too much when matters go to court.

Personal injury lawyers and the public generally should be under no illusion. These arguments will be used to bring general damages down across the board, not just in soft tissue injury matters.

The theory is that this will benefit everyone by reducing motor premiums. That theory completely removes the point of insurance. The concept of insurance is that everyone pays a certain sum and if they are unlucky enough to suffer a misfortune, burglary or injury or whatever, then they get paid out from that common fund.
If that concept is undermined, then there is no point in any insurance of any kind – Devil take the hindmost.

The paper has the nerve to say that having a fixed sum of £400.00, or £425.00, will “protect against under settlement by making claimants aware in advance of the appropriate level of compensation that they are due.”

Please all send me details of the cases where you have settled general damages in a whiplash claim for under £400.00.
The questions in relation to these proposals are:-

“Question 5: Please give your views on whether compensation for pain, suffering and loss of amenity should be removed for minor claims as defined in Part 1 of this consultation?

Please explain your reasons.

Question 6: Please give your views on whether a fixed sum should be introduced to cover minor claims as defined in Part 1 of this consultation?

Please explain your reasons.

Question 7: Please give your views on the government’s proposal to fix the amount of compensation for pain, suffering and loss of amenity for minor claims at £400 and at £425 if the claim contains a psychological element.

Please explain your reasons.”


For the first time a definition has been given of what the Government considered to be “minor” claims.

Again two options are put forward:-

  1. Injury duration of up to and including six months;
  2. Injury duration of up to and including nine months.

Here the Government does express a preference for the six month option.

The Government states that the average amount of compensation at present for an RTA related soft tissue injury of up to and including six months, with or without psychological claims, is around £1,800.00 and in relation to an injury of up to nine months around £2,100.00.

Separately the Government also proposes that all claims with a prognosis period of 12 months or under would automatically transfer to the small claims track, regardless of whether the measure to increase the small claims limit was implemented at the same time. (Paragraph 17).

The definition of soft tissue is the one in paragraph 16(A) of the RTA Portal, that is:-

“A claim brought by an occupant of a motor vehicle where the significant physical injury caused is a soft tissue injury and includes claims where there is a minor psychological injury second in significance to the physical injury.”

Generally it should be noted that as by definition an award of £400.00 or £425.00 is below the current small claims limit, let alone the proposed increased one, such a matter will be a small claim unless special damages bring the total above the ordinary small claims limit, which is currently £10,000.00.

Thus where there is a whiplash injury of up to 6 months duration, the small claims limit is £10,000.00, not £5,000.00.

Medical reports

One option is that no report can be obtained until six months after the injury, so as to allow the examining doctor to see whether or not there are ongoing problems. If there are then the matter does not come within this particular fixed damages scheme:-

“45. The ‘diagnosis approach’ could be used if the government decided to proceed with the option of removing compensation for PSLA from minor claims. This option would require claimants to wait until the end of the prescribed period (e.g. six months) before obtaining a supporting medical report through the MedCo Portal. An examination at this point would enable the medical expert to assess whether the claimant was still suffering from pain or other symptoms related to injuries sustained in their earlier RTA. The medical report would then be used to decide whether the claimant was entitled only to claim for non-PSLA losses, or was alternatively eligible for the new fixed tariff compensation scheme for more significant injuries.

  1. In order to control costs associated with the claim, only the cost of the six month medical report would be recoverable. If the claimant chose to seek a medical report any earlier than this, the cost of that earlier report would not be recoverable. In addition, the requirement to have a medical examination at a specific point may have a positive impact on the practice of claims being brought at the end of the limitation period.”

The Government then suggests, at paragraph 48, that there would be circumstances in which waiting six months would not be helpful to a claimant but gives no indication as to how a court would judge whether or not it had been reasonable for a claimant to obtain such a report:-

“48. However, there could be circumstances in which waiting six months would not be helpful to a claimant. A requirement for the claimant to pay for an earlier report (if one were needed before six months) could be viewed as disproportionate for claimants seeking necessary rehabilitation or who are unable to work and are seeking payment for loss of earnings given that such a report may in any event be required to evidence the claim for these losses (which remain recoverable). In addition, as well as deterring minor, exaggerated and fraudulent claims, such a requirement could also act as a disincentive for genuinely injured claimants.”

It is very obvious that the Ministry of Justice hopes that if a claimant has to wait six months before doing anything at all, then they will give up and not bother making any claim.

It is a sort of a reverse limitation period.

The Government also considers the prognosis approach, essentially the current process but has this to say:-

“53. The difficulty with this approach arises from the potential for pressure to be applied to inflate prognosis periods to just beyond the period defined as covering ‘minor’ road traffic related soft-tissue injury claims. For example, if the definition of ‘minor’ is set at up to and including six months, there is a question as to how many claims would end up with a prognosis period of seven months, thereby qualifying for compensation under the new tariff system. As noted above, the analysis of management information by MedCo will be an important safeguard in this area. The introduction of a tariff for claims as set out in Part 3 of this consultation document will also be a potential mitigation against such claims inflation.”

Thus the Ministry of Justice’s view is that the judges and the Judicial College have got it all wrong in valuing soft tissue injuries and that the doctors will simply lie and say that the prognosis period is seven months, so as to escape the fixed damages of £400.00/£425.00.

The questions in relation to six months/nine months are at questions 3 and 4:-

Question 3: The government is bringing forward two options to reduce or remove the amount of compensation for pain, suffering and loss of amenity from minor road traffic accident related soft tissue injury claims Should the scope of minor injury be defined as a duration of six months or less?

Please explain your reasons, along with any alternative suggestions for defining the scope.

Question 4: Alternatively, should the government consider applying these reforms to claims covering nine months’ duration or less?

Please explain your reasons along with any alternative suggestions for defining the scope.”

The questions in relation to how medical evidence should be obtained are at questions 8 to 10:-

“Question 8: If the option to remove compensation for pain, suffering and loss of amenity from minor road traffic accident related soft tissue injury claims is pursued, please give your views on whether the ‘Diagnosis’ approach should be used.

Please explain your reasons.

Question 9: If either option to tackle minor claims (see Part 2 of the consultation document) is pursued, please give your views on whether the ‘Prognosis’ approach should be used.

Please explain your reasons.

Question 10: Would the introduction of the ‘diagnosis’ model help to control the practice of claimants bringing their claim late in the limitation period?

Please explain your reasons and if you disagree, provide views on how the issue of late notified claims should be tackled.”




Part 3 – Introduction of a Fixed Tariff System for other RTA Related Soft Tissue Injury Claims – is at pages 20 to 23 of the report.

The proposal is for a fixed – not capped – sum for each of six bands, the lowest being the 0 – 6 months band discussed in detail in my post – SOFT TISSUE INJURIES: CONSULTATION IN DETAIL and the highest being for 19 – 24 months duration whiplash injuries.

In each case the extra element for psychological injury is trivial, ranging from £25.00 in the lowest band to £100.00 in the highest band.

The proposals are:-

New Tariff Amounts


New tariff amount Psych damages awarded Tariff with psych
0–6 months £400 £25 £425
7–9 months £700 £40 £740
10–12 months £1,100 £50 £1,150
13–15 months £1,700 £60 £1,760
16–18 months £2,500 £75 £2,575
19–24 months £3,500 £100 £3,600


Thus psychological injuries are valued at 13.7 pence per day.

To give some idea of how these tariffs compare with the current guidelines I set out below the tariff proposals, together with the current Judicial College Guidelines (12th Edition).


Injury Duration Judicial college guidelines amounts

(12th edition)

New Tariff amounts
0–6 months £200 to £3,520 £400
7–9 months £1,705 to £3,520 £700
10–12 months £1,705 to £3,520 £1,100
13–15 months £1,705 to £6,380 £1,700
16–18 months £1,705 to £6,380 £2,500
19–24 months £1,705 to £6,380 £3,500


The Government is also consulting on whether, in exceptional cases – undefined – the court should have power to increase these figures by up to 20% for injuries lasting more than six months.

All of these proposed changes require an Act of Parliament and will be in the same legislation restricting or scrapping general damages for RTA related soft tissue injuries lasting six months or less.

The proposal to ban pre-medical offers will also be in that Bill.

Under these proposals the maximum award for general damages would be £3,600.00. If a 20% exceptional circumstances addition is allowed the maximum goes up to £4,320.00, that is a small claim under the proposed reforms.

For the matter not to be a small claim, special damages would need to take the total claim over £10,000.00 – the general civil small claims limit.

Thus for RTA related soft tissue injuries of up to 24 months the small claim limit will, in reality, be £10,000.00.

The questions in relation to this section are:-

“Question 11: The tariff figures have been developed to meet the government’s objectives. Do you agree with the figures provided?

Please explain your reasons why along with any suggested figures and detail on how they were reached.

Question 12: Should the circumstances where a discretionary uplift can be applied be contained within legislation or should the Judiciary be able to apply a discretionary uplift of up to 20% to the fixed compensation payments in exceptional circumstances?

Please explain your reasons why, along with what circumstances you might consider to be exceptional.”




Part 5 – Introducing a prohibition on pre-medical offers to settle RTA related soft tissue injury claims – is at pages 31 – 32 of the report.

In reality this should be a non-issue. If every firm saw every client, then there is no problem at all as you take a Witness Statement from your client, including details of the injuries, and will be able to judge the acceptance or otherwise of any offer.

In spite of the title the Government is in fact consulting on whether there should be a ban on pre-medical offers in all personal injury claims. Question 17 and 18 read:-

“Question 17: Should the ban on pre-medical offers only apply to road traffic accident related soft tissue injuries?

Please explain your reasons why.                                                                                            

Question 18: Should there be any exemptions to the ban, if so, what should they be and why?”

Of course the first question should be “who is going to pay for the medical report upfront?”

The Ministry of Justice and the Lord Chancellor do not seem to realise that basically law firms act as banks for those clients in relation to medical reports and pay, or agree to pay, the £216.00 fee. Ultimately, in a successful case, this is recoverable from the defendant.

Most solicitors get this on credit. Obviously individual claimants will not be able to get such credit from MedCo reporters and thus will have to find the upfront if unrepresented – and it is of course the Government’s idea that everyone should be unrepresented in such claims.

There is a court fee remission. There is no medical report fee remission scheme.

There are so many ironies in these two pages, that it is hard to know where to begin.

Here is paragraph 105:-

“It has been argued that this type of offer is used to control the costs of the claims process. The argument is that it is not commercially viable to challenge low value PI claims in the fast track. It is not known exactly how many such settlements are made each year, but anecdotal evidence indicates that around 10% (in excess of 50,000 cases) of all RTA PI claims are currently settled without a medical assessment.”

We know that none of these claims will be in the fast-track as the Government is both increasing the small claims limit to £5,000.00 and slashing general damages for RTA related soft tissue injury claims so that they will all be in the small claims track.

In any event, surely a rich and powerful multi-national insurance company should be free to take a commercial view and settle a matter to avoid legal costs.

After all that is what happens up and down the country every day in litigation.

The whole tone of everything coming out of the Government, the Judiciary and everyone else for years has been that matters should be settled, and not subject to litigation, which should be a last resort.

Thus we have the courts punishing parties in costs for not making offers and the Pre-Action Protocols all, without exception, require parties to seek to settle matters.

Yet here is a proposal, which the Government intends to enshrine in an Act of Parliament, making it illegal for one party to potential litigation to make an offer to settle a matter, however generous that offer is.

Take paragraph 106:-

“There is also anecdotal evidence that a proportion of claimant solicitors request such offers on behalf of their clients to close the claim quickly and maximise the profit made from the claim. This can lead to under-settlement for claimants and possible future litigation if the accident actually causes serious long term health issues to a client whose lawyer did not arrange for an appropriate medical examination and report.”

So this is put forward as a client protection measure to prevent under-settlement for claimants.

I do not know whether to laugh or cry. The whole tone of the paper is that soft tissue injuries – and that is all we are talking about here – are massively overcompensated and that the judges, the courts and the Judicial College have all greatly overstated the level of damages for soft tissue injuries.

Hence the Government’s proposal to slash general damages in all but the most serious cases of whiplash – see my post – TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES and SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

So, for example, on the Government’s own figures a soft tissue injury of 0 – 6 months duration would attract an award under the Judicial College Guidelines of between £200.00 and £3,520.00. That is to be reduced to £400.00, with just £25.00 extra for psychological injuries.

Throughout the tariff system psychological injuries are valued at 13.7 pence per day.

Yet the author of this report talks about the behaviour of claimants’ solicitors leading to under settlement for claimants.

This is beyond parody.

Throughout the report the Government refers to the Judicial College 12th Edition Guidelines.

They were replaced in September 2015 by the 13th Edition and therefore the figures given for existing levels of award are in fact too low. This obviously has the effect that the proposed Government cuts in damages are even greater than appears in the report.

Yes, of course insurance companies take a commercial view – and indeed they are bound by their duty to their shareholders to do so. However the idea that insurance companies are regularly paying up on claims they know to be completely fraudulent is plain nonsense.

How curious that the Government feels the need to protect insurance companies in a way that even the insurance companies do not think necessary.

With fixed tariff damages this leads to absurdities. A client is injured and after four months agrees that s/he has no continuing symptoms and does not suffer psychological injury. By law the damages are £400.00.

Yet the parties cannot settle that aspect of the claim without obtaining a medical report which will cost £180.00 at current rates. That is ridiculous.

Furthermore if there is a need to protect claimants against under settlement and to prevent insurers from taking a commercial view, then why is this prohibition not being implemented across the board, not just the personal injury board, but the entire civil litigation process?

I refer above to the fact that the Government is consulting on having a ban wider than RTA soft tissue injury but it is clear from paragraph 112 that that is their preference.

“In introducing a ban it is important to be clear on the scope of such a ban. The government proposes that a ban on pre-medical offers should apply only to RTA related soft tissue injuries. We have considered whether the ban should be extended to all PI claims, partly to ensure consistency in approach, but we believe it is debatable how much extra benefit there would be in such an extension.”

The government is also concerned that “many major retailers have budgets set aside to settle claims speedily.”

So what are they meant to do? Refuse to settle claims speedily? Fight every claim?

As stated above in every other area of law the whole system is designed for parties to try and settle claims speedily and yet here are supermarkets being criticised for doing just that.

These are the two worst pages of illogical trash that I have ever seen from a Government department.




Part 6 – Implementing the recommendations of the Insurance Fraud Task Force deals with the Claim Notification Form and a proposed amendment in relation to Qualified One-Way Costs Shifting and this part appears at pages 33 and 34 of the Consultation Paper.

One proposal is that the source of referral of any claim be included on the Claim Notification Form and that that information should be notified to the Solicitors Regulation Authority and the Claims Management Regulation if it is suspected by the defendant insurance company that the claimant representative is breaching the referral fee ban.

Question 20 reads:-

Question 20: Should the Claims Notification Form be amended to include the source of referral of claim?

Please give reasons.”

The other proposal is that the provisions relating to Qualified One-Way Costs Shifting should be amended so that a claimant requires the court’s permission to discontinue within 28 days of a trial.

This is to stop late discontinuance by a claimant causing the defendant costs which it will not recover, due to QOCS.

Although superficially attractive this proposal is in fact flawed.

A similar proposal was made in relation to Employment Tribunal proceedings, but ultimately rejected. The problem is that if a claimant faces a potential penalty for discontinuing, but no penalty for going ahead and losing at trial, then the financial incentive is in fact to pursue the claim and lose, rather than doing the sensible thing, which is to discontinue.

The proposal is also based on two misunderstandings of the law, both contained in paragraph 121 of the report which reads:-

“The IFT’s Personal Injury Working Group made a recommendation in relation to QOCS and the late withdrawal of claims. All members of that Group (including claimant and defendant representatives) were concerned that the current arrangements allow for the late withdrawal of fraudulent claims with impunity, although these claims may put the defendant to considerable expense which they will not be able to recover. Part 38.4 of the Civil Procedure Rules (CPR) sets out the rules on qualified one way costs shifting (QOCS). QOCS applies in PI cases and in essence departs from the general costs provision because a losing claimant is not required to pay a successful defendant’s legal costs.”

Firstly Qualified One-Way Costs Shifting is dealt with by CPR 44.13 to 44.17 and not CPR 38.4 which deals with discontinuance.

Furthermore a claimant cannot withdraw what may be a fraudulent claim “with impunity” as the Practice Direction accompanying CPR 44 specifically deals with that situation at Practice Direction 44, 12.4(c) which provides:-

“(c) where the claimant has served a Notice of Discontinuance the court may direct that issues arising out of an allegation that the claim was fundamentally dishonest be determined notwithstanding that the notice has not been set aside pursuant to Rule 38.4;”

As I say in my book – page 148:-
“That clearly envisages that in the absence of an allegation of fundamental dishonesty a Notice of Discontinuance will not of itself trigger a costs liability. Otherwise what is the point of the Practice Direction giving the court the power to determine issues arising out of an allegation of fundamental dishonesty if the power exists anyway?

Otherwise a claimant in such a position who goes to trial and wastes everyone’s time and money and loses will generally pay no costs and will be in a better position than a claimant who sees the weakness of the case and discontinues.”

Thus it is crystal clear already that the court has the power, in a situation where fundamental dishonesty is alleged, to determine that issue and disqualify QOCS protection, whether or not the claimant has discontinued and whether or not that Notice of Discontinuance has been set aside.

It is a shame that the Ministry of Justice just reprint ABI press releases without even considering the law.

Question 21 asks:-

“Question 21: Should the Qualified One-way Costs Shifting provisions be amended so that a claimant is required to seek the court’s permission to discontinue less than 28 days before trial (Part 38.4 of CPR)?

Please state your reasons.”




Part 7 – Call for evidence on related issues – appears at pages 35 – 42 of the paper.

The Ministry of Justice seeks views on reforms to:-

  1. Credit Hire;
  2. Early Notification of Claims;
  3. Rehabilitation;
  4. Recoverability of disbursements; and
  5. Introducing a Barème type system.

The Government states that it is not minded to undertake reform immediately in these areas but “will reflect carefully on responses to this consultation and decide how best to proceed.”

Credit hire

The Government invites views on one of four potential models for dealing with credit hire agreements and question 22 reads:-

“Question 22:

Which model for reform in the way credit hire agreements are dealt with in the future do you support?

  1. a) First Party Model
  2. b) Regulatory Model
  3. c) Industry Code of Conduct
  4. d) Competitive Offer Model
  5. e) Other

Please provide supporting evidence/reasoning for your view (this can be based on either the models outlined above or alternative models not discussed here).”

First party model

Under this model the temporary replacement vehicle would be provided by the policyholder’s own insurer, regardless of who was at fault for the accident.
Thus the policyholder would be required to use their own insurance cover and so credit hire charges would cease to be the subject of litigation.

Regulatory model

This would not change the current legal position but would involve the introduction of formal regulation of temporary replacement vehicle providers.

Industry code of conduct

Competitive offer model

This model would allow the at fault party, effectively their insurer, to get their own quote which could be used to challenge the cost of the temporary replacement vehicle from the insurer of the party not at fault.

The Government expresses no preference.  

Early notification of injury/intention to claim

This involves notifying the insurer within a set time period.
Consideration is also to be given as to whether a claimant must seek medical treatment within a short period of time. For example in Sweden it is 72 hours.

The Government suggests a possibility of four weeks in this country, failing of which there would be a rebuttable presumption that the claim is minor.

Questions 25 and 26 read:-

Question 25: Do you think a system of early notification of claims should be introduced to England and Wales?

Please provide reasons and/or evidence in support of your view.

Question 26: Please give your views on the option of requiring claimants to seek medical treatment within a set period of time and whether, if treatment is not sought within this time, the claim should be presumed to be ‘minor’.

Please explain your reasons.”


The options set out are:-

“a) Option 1: Rehabilitation vouchers – which could only be redeemed for rehabilitation sessions received/attended. The rehabilitation provider would then be paid for only the actual vouchers used by the claimant, not for the number of sessions scheduled. This would help prevent phantom rehabilitation claims, but may be complex to administer as the rehabilitation provider could only be paid after the insurer has proof that the rehabilitation treatment has occurred.


  1. b) Option 2: All rehabilitation arranged and paid for by the defendant – some claimants and insurers have suggested that private treatment/rehabilitation should be arranged through the defendant’s side, possibly providing the claimant with a choice of a small number of providers. This would help speed up access to treatment and allow greater independence and transparency of the process.
  1. c) Option 3: No compensation payment made towards rehabilitation in low value claims – this option would mean the claimant would need to fund any rehabilitation costs themselves. The cost of rehabilitation is currently recoverable through the payment of other compensation for losses incurred (this is commonly referred to as special damages), the availability of which the government has already made clear it does not intend to restrict, and further primary legislation would be required to implement such a change.
  1. d) Option 4: MedCo to be expanded to include rehabilitation providers – the MedCo system could be extended to cover rehabilitation services in addition to medical reporting services. The addition of rehabilitation providers would need to be considered carefully, including the identification of the legislative route required to implement changes in this area.
  1. e) Option 5: Introducing fixed recoverable damages for rehabilitation treatment – this may help prevent unnecessary claims. There could, however, be difficulty in setting the overall rates as different claimants would be likely to have different rehabilitation needs. Thought would need to be given to whether the damages would be set per session or by fixing an upper value limit which could not be exceeded.”

Questions 27 and 28 refer:-

Question 27: Which of the options to tackle the developing issues in the rehabilitation sector do you agree with (select 1 or more from the list below)?

Option 1: Rehabilitation vouchers

Option 2: All rehabilitation arranged and paid for by the defendant

Option 3: No compensation payment made towards rehabilitation in low value claims

Option 4: MedCo to be expanded to include rehabilitation

Option 5: Introducing fixed recoverable damages for rehabilitation treatment


Please give your reasons.

Question 28: Do you have any other suggestions which would help prevent potential exaggerated or fraudulent rehabilitation claims?”

Recoverability of disbursements

The Government is looking at claimants having to fund their own medical reports without being able to recover the cost, even if they win. The key sentence:-

“Rather than the assumption that the defendant would nearly always pay for the provision of medical evidence, the onus would be transferred to the claimant.”

Question 29 reads:-

Question 29: Do you agree or disagree that the government explore the further option of restricting the recoverability of disbursements, e.g. for medical reports?

Please explain your reasons.”

A potential future option – a points-based / Barème approach

This is a points system with 100 representing the highest possible rating, that is the most serious injury and moving down from there.

Question 30 relates and states:-

Question 30: A new scheme based on the ‘Barème’ approach, could be integrated with the new reforms to remove compensation from minor road traffic accident related soft tissue injury claims and introduce a fixed tariff of compensation for all other road traffic accident related soft tissue injury claims. What are the advantages and disadvantages of such a scheme?

Please give reasons for your answer and state which elements, if any, should be considered in its development.”

Other matters

Question 31 reads:-

“Question 31: Please provide details of any other suggestions where further government reform could help control the costs of civil litigation.”

Part 8 – Legislative timetable and implementation

This is a very short piece on page 43 and simply says that the Government intends to implement the main reforms in relation to the small claims limit, whiplash injuries and banning pre-medical offers as soon as possible.

Part 9 – pages 44 – 74 is a list of the questions.

Part 10 is an introduction to the Impact Assessment, the full text of which appears later in the document.

Broadly it is a whole series of questions asking if those responding to the consultation agree with the assumptions made by the Government in the Impact Assessment.

These further questions appear at pages 75 – 78 of the report.

A reminder that the deadline for responding to the whole consultation paper is 5.30pm on Friday 6 January 2017.


Written by kerryunderwood

November 30, 2016 at 12:01 pm

Posted in Uncategorized

4 Responses

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  1. just a brilliant summary

    martin hulston

    January 4, 2017 at 10:20 am

  2. Hi Kerry

    Just looking at this again in the light of your e mail today advertising your course and your forthcoming book. I am slightly unclear as to whether in your course you will be suggesting that we enter into contingency fee agreements with clients to assist if the Small Claims Limit is raised as anticipated?. It this what you are planning? If so I may attend on your course if you think we may have an economic business model going forward notwithstanding the forthcoming changes


    Francis O’Neill.

    Francis O'Neill

    February 6, 2017 at 6:33 pm

  3. Francis

    Yes, in a word!



    February 6, 2017 at 6:35 pm

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