WHIPLASH TARIFF AND ROAD TRAFFIC ACCIDENT SMALL CLAIMS INCREASE – TUESDAY, 11 MAY 2021 AT 4PM – 5.30PM UK

You can purchase the recording of the Zoominar for £50 plus VAT here.

Below are some of the issues that cropped up during the Zoominar.

If you knew all of this, then fine; if not you probably need to buy the Zoominar 😊.

If you do, then you can also have a free copy of Kerry on… Qualified One-Way Cost Shifting, Section 74 and Set-Off as well as my three-volume book Kerry on… Personal Injury Small Claims, Portals and Fixed Costs.

On 11 May 2021, published on 12 May 2021, the Master of the Rolls approved amendments to the new Road Traffic Accident Small Claims Limit Portal here, coming into effect pm 31 May 2021.

Below I deal with some issues that arose in the chat box during the Zoominar, as well as some matters raised in emails since, and I thought that I would share my views with all of you, as, whether or not you raised these matters, they may be of interest to you.

Small Claims Limit Increase

Any Road Traffic Accident Claim arising from an accident occurring on or after 31 May 2021 is subject to the new Small Claims Limit of £5,000, whether or not the injuries are whiplash injuries.

The Small Claims Limit has not risen for any other type of personal injury work, but the government has announced that with effect from April 2022 the Employers Liability and Public Liability Small Claims Limit will increase from £1,000 to £1,500.

These limits are in relation to general damages and the overall Small Claims Limit remains at £10,000, which means that in a Road Traffic Accident matter of any kind, the general damages must exceed £5,000, or the total damages exceed £10,000, for the matter to be cost bearing.

• Specific Question: “If C suffers non- neck or back and wrist only say attracting £2000 award then will it proceed under the present portal and are we entitled to staged costs?”

Answer: No. it will proceed in the new Small Claims Portal and no costs will be recovered.

• Specific Question: “Having read so much about the reforms I have actually come across a lot of conflicting information surrounding cases which enter this new portal and those which don’t. To clarify, if I have an under £5K PLSA but the injury is a knee – does this mean my £5k small claims limit will apply but it will go through the existing MOJ portal. If this is the case, do we simply conclude and the defendant simply pays costs, stage 1 and 2 no longer applicable?”

Answer: No, it will go into the new Pre-Action Protocol for Personal Injury Claims below the Small Claims Limit in Road Traffic Accidents (The RTA Small Claims Protocol).

Accidents which occur before 31 May 2021 are unaffected.

• Specific Question: “A hybrid injury – i.e. whiplash + STI to another area such as the knee is suitable for the OIC portal?”

Answer: That will depend on if the total of general damages is valued at £5,000 or less and the total of special damages is valued at £10,000.

The Portal is a Road Traffic Injury Portal, not a Whiplash Portal.

• Specific Question: “We need £5k PSLA to get into Fast track on applicable cases. Presumably if we have £4k PSLA + £8k Specials we are still limited and stuck in small claims?”

Answer: No, the total is over the general Civil Litigation Small Claims Limit of £10,000, and therefore this matter goes into the existing Portal with stage costs and fixed recoverable costs etc.

Funding Methods

Nothing changes. My recommended method is a Pre-Action Contingency Fee Agreement under section 57 of The Solicitors Act 1974 combined with a Bridging Agreement and a Conditional Fee Agreement.

Please note that even in a small claim, you cannot use a Contingency Fee Agreement under section 57 once proceedings have been issued.

Please also note that in all personal injury matters the maximum that can be charged under a Damages-Based Agreement is 25% of damages.

• Specific Question: “Post changes what do you think will be the best form of agreement with the client to be able to deduct 40% damages..DBA? contingency fee?”

Answer: As set out above, but you are free to have a Conditional Fee Agreement from the beginning. What you cannot do is to have a Damages-Based Agreement and seek to charge more than 25% of damages.

Answer: It does not need to be that combination. You could just have a Conditional Fee Agreement from the beginning; the key is not to have a Damages-Based Agreement.

The Bridging Agreement is necessary to act as a contract between solicitor and client, but if the matter becomes issued, then the Conditional Fee Agreement is retrospective effect from the day of instructions. This is lawful and has been sanctioned in a number of cases.

It is possible to have a single document dealing with all eventualities, but the courts are reasonably familiar with Contingency Fee Agreements, very familiar with Conditional Fee Agreements, and I do not want a single hybrid agreement, as this is not easy to follow, and is likely to open up challenges by former clients under the Solicitors Act 1974.

Market Rate

This, by definition, involves crystal ball gazing, but my advice is to charge 40% including VAT, for the reasons outlined during the Zoominar. I know some firms plan to do this.

• Specific Question: “What do you think the market % will be that solicitors will charge & seek to deduct from damages, under the new tariff?

• Specific Question: “Was that 40% plus ATE?”

Answer: No. I cannot see why ATE would ever be necessary in a Small Claim, but if you do feel it necessary, then my view is that the 40% market rate will include ATE.

Which Portal?

This has nothing to do with the injury, but purely the value of the claim.

If it is under £5,000 then it goes on the new Small Claims Portal; if not, it goes through the existing system.

• Specific Question: “Sorry if I am going over old ground; as an example, if an adult occupant of a car (and not any of the exemptions) suffers only a non-whiplash injury (i.e. STI knee), the matter WILL progress via the new portal, but the tariff will not apply?”

Answer: The Whiplash Tariff will not apply as it is not a Whiplash Claim.

The new £5,000 Road Traffic Accident Small Claims Limit does apply, and so will depend upon the value of the claim as to whether or not it goes on the new portal.

The type of injury has no effect on which portal it will go onto, but obviously, for reasons discussed, a whiplash injury caught by the tariff will almost always be a small claim.

• Specific Question: “If post May 2021 and if a claimant was to suffer a wrist and knee injury non orthopaedic but no neck back or shoulder then do you agree that the claim will fall under the present rules not the new rules?”

Answer: No. All Road Traffic Accident matters are subject to the new rules from 31 May 2021.

Valuation of Non-Whiplash Injuries

Valuation of Non-Whiplash Injuries remains the same, that is by reference to the Judicial College Guidelines.

• Specific Question: “Are all “non whiplash injuries” e.g. soft tissue injury of foot, hand, knee etc calculated by reference to JC Guidelines?”

Answer: Yes.

• Specific Question: “If you have a Claimant who was involved in an RTA and suffered whiplash injuries PLUS a wrist or ankle injury, is the whiplash injury tariffed and then the wrist or ankle injury assessed with reference to the JC guidelines?”

Answer: Yes – see section 3 (8) of The Civil Liability Act 2018.

If however, the soft tissue in jury is an injury which is a part of or connected to another injury and the other injury is not an injury of soft tissue in the neck, back or shoulder as defined, then that injury is excepted and is not subject to the Whiplash Tariff.

Thus your example of a wrist or ankle injury and a separate injury would indeed have the Whiplash Injury Tariff applied and the rest valued by reference to the Judicial College Guideline.

If however, for example, there was a non-soft tissue injury to the claimant’s neck, then any soft tissue injury to the neck would be exempted from the tariff.

Children

This is confirmed by the Civil Procedure (Amendment No. 2) Rules 2021 & 129th Practice Direction Update which specifically excludes children or protected parties from the new Road Traffic Accident Small Claims Track Limit and the new Road Traffic Accident Small Claims Protocol on the basis that they will not be able to sources their own medical report, which under the Civil Liability Act 2018 is required to settle a claim for Whiplash injuries, via the online service.

This shows that there is a separate procedure for children or protected parties who are subject to the new Whiplash Tariff, but shows that they are so subject to, and not excepted.

Please also note the amendment to the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents 31 July 2013 – that is the existing portal – wherein the definitions section, a new (19) is added as follows:

“(19)      ‘vulnerable road user’ – a road user is treated as ‘vulnerable’ where, at

the time the accident occurred, the claimant was—

(a) using a motor cycle;

(b) a pillion passenger on, or a passenger in a sidecar attached to, a motor

cycle;

(c) using a wheelchair, a powered wheelchair or a mobility scooter;

(d) using a bicycle or other pedal cycle;

(e) riding a horse; or

(f) a pedestrian;

and ‘vulnerable road user’ has that meaning in this Protocol; and”

You will notice no mention of a person being a vulnerable road user because they are a child or a protected party.

The relevant legislation is the Civil Liability Act 2018 and section 1 (4) reads:

(4)          For the purposes of this Part a person suffers a whiplash injury because of driver negligence if—

(a) when the person suffers the injury, the person—

(i) is using a motor vehicle other than a motor cycle on a road or other public place in England or Wales, or

(ii) is being carried in or on a motor vehicle other than a motor cycle while another uses the vehicle on a road or other public place in England or Wales,

(b) the injury is caused—

(i) by the negligence of one or more other persons, or

(ii) partly by the negligence of one or more other persons and partly by the negligence of the person who suffers the injury, and

(c) the negligence of the other person or persons consists in an act or acts done by the person or persons while using a motor vehicle on a road or other public place in England or Wales.

Thus, it will be seen that for the Whiplash Tariff to apply, the person suffering the injury, must be using or being carried in a motor vehicle other than a motorcycle.

That is the way that so called vulnerable road users are excluded, as they do not come within that definition and those exclusions include;

• motorcyclists
• pillion and sidecar passengers;
• cyclists;
• pedestrians;
• horse riders;
• those using mobility scooters;
• those using wheelchairs, including powered wheelchairs.

It will be noted that the exclusions relate to what the person was doing on the road, or to put it another way, the inclusions relate to what a person was doing on the road.

They do not relate to the capacity or status of the individual.

Thus a family driving to a location who then get out and ride their bicycles are not vulnerable road users while they are in the car, are not vulnerable road users as they get out of the car [section 1 (6) of the Civil Liability Act 2018], but are vulnerable road users as they get on their bicycles and cycle off etc.

A child, or a protected person, is not a vulnerable road user as such.

• Specific Questions: “I was under the impression that kids were excluded from these insurer propelled changes – is that not correct? please clarify thanks”

Answer: No, it is not correct.

• Specific Question: “Children & protected parties can proceed via the new OIC portal but they will be allocated to the Fast Track so in a successful claim will generate fixed costs? If they settle pre-issue (with Part 8 used to approve and therefore not technically allocated) we are still going to get our fixed costs?  I am caught here as Table 6B is giving costs only for cases which settle over £1000. If we are on the tariff then the likelihood is that there are going to be a large proportion of sub £1k cases.”

Answer: No, they cannot. Paragraph 4.3 (d) excludes vulnerable users, (f) excludes children and (g) excludes protected parties. Nothing changes. The existing procedure applies.

Other Matters

• Specific Questions: “Does the exclusion of children from the small claims track apply as at the date of the accident, or the date of litigation?  i.e. What if the claimant is 17 when they are injured but 18 when they start their claim/issue proceedings?”

Answer: The date of issuing proceedings, the specific exception being “where, on the date the proceedings are started, the claimant is a child or a protected party.”

Consequently, a claimant who is 17 when injured but 18 when proceedings are issued is not excluded from the new Small Claims Track Limit of £5,000.

Having said that, there is some confusion as the Civil Procedure (Amendment No. 2) Rules 2021 & 129th Practice Direction Update state that because children or protected parties are excluded from the new Small Claims Track Limit and the Road Traffic Accident Small Claims Protocol, they will not be able to source their own medical report, which under the Civil Liability Act 2018 is required to settle claims for whiplash injuries, via the online service. New rule 26.6B provides that where the claim arises from a Road Traffic Accident which occurs on or after 31 May 2021, and the claim is for, or incudes a claim or whiplash injury the normal track for that claim will be the fast track and the claim must not be allocated to the Small Claims Track.

Thus, as I read it, a child or protected party who suffers an injury subject to the whiplash tariff is not subject to either the new, nor the old Small Claims Track Limit, as the matter must be allocated to the fast track and not the Small Claims Track.

However, a child or protected party whose injury is not a whiplash injury is, nevertheless, subject to the old Small Claims Track Injury Limit of £1,000.

Minor Psychological Injury

• Specific Question: “Is there a definition of “minor psychological injury”? To suggest when such a case may fall out.”

Answer: No.

• Specific Question: “So if the courts can’t change the tariffs, what is Birkenhead CC going to do?!?!”

Answer: Good question 😊😊.

Without Prejudice

• Specific Question: “As insurers cannot settle claims on a without prejudice to liability basis under the new process what does this mean for counterclaims made by the insurer’s client? Is any agreement binding and does the counterclaim have to be made in any proceedings issued under the new process?”

Answer: I was unaware of the rule. Please point to your authority for that statement and I will try and deal with the question😊.

Medical Evidence

• Specific Question: “are the Rules the same for any subsequent medical reports e.g. GP report recommends a psychologist; will the initial report need to be disclosed beforehand prior to the instruction of the psych expert”

Answer: No.

As you correctly point out the current Road Traffic Accident Portal requires that a further medical report will only be justified where it is recommended in the first expert’s report and that report has first been disclosed to the defendant [paragraph 7.8B (2) (a) and (b)].

In the new Pre-Action Protocol for Personal Injury Claims below the Small Claims Limit in Road Traffic Accidents (the RTA Small Claims Protocol), paragraph 7.6 provides that a further medical report will only be justified where it is recommended in the first expert’s report [paragraph 7.6 (1) (a)].

However, there is no requirement that the defendant be served with the first report, before a second report is obtained.

Paragraph 7.6 (5) reads:

“(5) paragraph 8.2 below explains the circumstances in which the claimant will be asked when obtaining a further medical report if they wish to disclose the first report to the compensator.”

Paragraph 8.2 (9) reads:

“(9) the claimant may also choose to release the medical report to compensator via the Portal when they request a further medical report under paragraph 7.6 above. The release of the medical report under this paragraph or under paragraph (8) above does not signify that the claimant is ready to settle the claim.”

Thus disclosure in the Small Claims Portal is voluntary, not compulsory.

Existing Scheme

• Specific Question: “Thanks ..on the disclosure of 1st report before sub reports I have a present case and I argue that applies only if a stage 2  final offer is made and not interim is that right”

Answer: No, it is not right.

The existing Road Traffic Accident Portal differentiates between:

• Medical Reports – all claims;
• All claims other than Soft Tissue Injury Claims – subsequent Medical Reports;
• Soft Tissue Injury Claims – Medical Reports.

I do not know what type of claim you are referring to.

The requirement to disclose the first report before obtaining further reports only applies in Soft Tissue Injury Claims and the relevant provision is 7.8B (2) (b).

As set out elsewhere in this email, that provision is not carried over into the new Road Traffic Accident Small Claims Protocol.

Bankrupt Claimants

• Specific Question: “Bankrupt Claimants – if they fit all of the criteria but are identified as bankrupt at the outset would you simply bypass the OIC and MOJ portal, with a letter of claim? If the bankruptcy is shortly to be discharged do you think we would be criticised for remaining outside of the OIC process?”

Answer: It is not a question of bypassing the Portal; bankrupt claimants are excluded from the Portal process by paragraph 4.3 (h).

I do not understand the second part of the question. A bankrupt cannot bring any proceedings without the permission of the Trustee in Bankruptcy and it would be the trustee who would make that decision and as the trustee’s duty is to limit costs, as indeed is a solicitor’s general duty, this could cut both ways.

Issuing in the process is likely to be cheaper for the client in that the costs will be lower, but issuing outside means that there may be some costs recovery.

Please note that this problem exists already. Neither existing Portal applies where the claimant is a bankrupt – see current Road Traffic Accident Portal, paragraph 4.5 (5) and current EL/PL Portal, paragraph 4.3 (4).

I deal with this issue at great length in Chapter 23 of my book Kerry On… Personal Injury Small Claims. Portals and Fixed Costs which you have, or are entitled to, free of charge, as a delegate to the Zoominars.

• Specific Questions: “Finally, you mention that there is scope for costs for representation if the matter proceeds to a hearing on a denied case. Could this be someone ‘in house’ – i.e. if we had a fee earner already in the firm who was competent in dealing with such matters they could attend. Or do we need a separate entity?”

Answer: I may not have made myself clear. Anyone can represent, for a fee, a party in the Small Claims Track. The person does not need to be a qualified lawyer and does not need to work for a law firm, so yes, it could be someone inhouse.

My point is that firms may consider setting up completely separate entities without the regulation and professional indemnity insurance etc. requirements of recognized bodies as their costs will obviously be much lower.