SMALL CLAIMS: rather than raising limit, plan incentivises efficient and early case handling
A new way of dealing with all personal injury claims worth less than £10,000 - including cost incentives for insurers to admit liability early - was proposed by the Law Society last week.
Under the scheme, dubbed 'Fast and Fair', a claimant solicitor would complete a standard early notification form as soon as the injured client visits them. This form, which would be sent within seven days of receiving instructions, would provide enough information to allow the insurance company to consider the claim.
The solicitor would be expected to wait 21 days before doing any further work on the claim, keeping costs down. This would allow the insurer to offer an apology if appropriate, admit liability, and make an early offer of compensation. It would also enable solicitors and insurers to start addressing rehabilitation.
Other elements of the scheme include simple claim forms, the claimant sending a 'compensation package' to the insurer, and reinforcement of the sanctions for failing to beat a part 36 offer.
The Society argued that its proposal is better than an increase in the small-claims limit. Desmond Hudson, chief executive for representation, said: 'There should be a simple process with strict time limits, incentives for efficient handling and for both sides to settle a reasonable claim early.'
The Society's scheme follows earlier proposals from the Association of Personal Injury Lawyers (APIL), the Association of British Insurers, and insurer Norwich Union, ahead of an imminent consultation on simplifying the claims process from a ministerial steering group on the compensation culture.
An APIL spokeswoman said: 'While APIL recognises the current system is not perfect, we agree with the Society's assertion that it is effective in delivering fair compensation, and maintain that it can be improved and built upon without the need to re-invent the wheel.'
A spokesman for the Forum of Insurance Lawyers, which acts for defendants, said the current cost of processing and handling lower-value claims is too high and the time taken to deliver compensation too long.
Philip Hoult
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