Since 1 January 1989 plaintiffs' personal injury claims have been subject to the Social Security Act 1989 (as amended).

Its intention was to recover benefits paid by the DSS to victims of accidents out of any compensation claim the victims subsequently made (subject to certain exceptions) - a laudable intention but one which has not been without problems.It is quite common for other parties to have an interest in a plaintiff's claim, for example, employers who have a contractual term that company sick pay be repaid.

Personal injury practitioners will also regularly come across health insurers who similarly wish to recover the benefits paid out under the health insurance as a result of the plaintiff pursuing an accident claim.Both the employer and health insurer regularly accept that if the plaintiff only recovers a percentage of his or her claim due to contributory negligence then their claim should be similarly apportioned.Unfortunately, this is not the case with the Compensation Recovery Unit (CRU) - its rules are inflexible.

All benefits received must be repaid.

It is possible therefore for a large claim to be extinguished in full.-- Example 1.

The plaintiff has a claim worth £60,000.

His benefits to date are £30,000.

He is at risk of being found 50% to blame for his accident.

A court would therefore award him £30,000 and the defendant's insurer would be bound to pay all to the CRU.The astute insurer, however, offers £2500.

Does the plaintiff go for the paper award of £30,000 but receive nothing, or accept £2500 as token compensation?Most take the latter course which means, in this case, that the plaintiff loses £27,500 (at its simplest, although even under the old legislation the plaintiff would have suffered a deduction in his compensation because of the defendant being entitled to offset certain benefits).

The defendant saves £27,500 and the CRU loses £30,000.The CRU recently acknowledged that the small claims exemption was being abused.

If it is removed then, in this example, the plaintiff loses £30,000, the defendant saves £30,000 and the CRU still loses £30,000.If the CRU accepted a deduction for contributory negligence, the plaintiff would receive £15,000, the defendant would pay £30,000 and the CRU would receive £15,000.This has to be a winning solution for all.

The plaintiff can understand how his compensation is calculated and the CRU tops up its coffers with a much needed £15,000.

Even the defendant's insurers cannot complain as, after all, they are not paying out extra as a result of the suggested change.The example works as well with smaller figures and most personal injury practitioners will be able to cite a long list of £2500 settlements.-- Example 2.

The plaintiff's claim is worth £4000.

However, £200 of the special damages are open to attack and £400 has to be repaid to the CRU.

There is a risk of being found 25% to blame.

If the court does find the plaintiff 25% responsible he or she would be awarded £3000 and £400 of that would go to the CRU.An astute insurer would offer £2500, arguing that the claim is only worth £3800 and suggesting a minimum of 25% contributory negligence.

In such a case the court would award £2850 and the insurer would have to pay back to the CRU £400 of that, leaving the plaintiff with £2450.

In such circumstances, the plaintiff is bound to accept £2500.This results in the plaintiff receiving £2500 but losing a maximum of £100, the defendant paying £2500 but potentially saving £500 and the CRU receiving nothing and losing £400.If the CRU were bound by the apportionment of liability, the plaintiff would receive £2700, the defendant would pay £3000 and the CRU would receive £300.Even the £3800 argument causes no concern to the plaintiff, who receives £2550, the defendant, who pays £2850, and the recovery unit, which receives £300.The second aspect that causes concern is a dispute over the medical evidence.

Typically, the plaintiff's expert states that all the injuries are accident related.

The defendant's expert, however, maintains they are not and the symptoms arise out of subsequent trauma or pre-existing problems.The CRU is not bound by the findings of the court which tries the matter.

This causes uncertainty as far as the plaintiff is concerned.Go back to example 1, but assume that instead of there being contributory negligence, the defendant's evidence is that the plaintiff should have returned after six weeks.

The defendants calculate the claim as £4000 to include six weeks loss of earnings.

From that sum benefits worth £30,000 have to be deducted, although the benefits actually claimed as a result of the injury according to the defendant's evidence would only be £250.Strictly, the defendant should give notice that he or she has paid £4000 to the CRU.

If the plaintiff accepts, he or she cannot guarantee that the CRU will accept the defendant's evidence upon review/appeal.

If it does, the CRU pays the plaintiff £3750.

If it does not accept the defendant's evidence then the plaintiff receives nothing.This is a very difficult situation for the plaintiff.

The astute insurer will offer £2500 supposedly on the basis that this way the plaintiff gets £2500 instead of nothing.

In fact, the defendant saves £1500 and the CRU loses either £250 or £4000 (depending on whether the plaintiff would have been successful in the review/appeal).The situation is worse if there is a combination of the two, for example allegations of contributory negligence and a conflict of medical evidence.

There is no certainty at all for the plaintiff who accepts any offer as, upon review/appeal to the CRU, he or she cannot rely even on agreed facts between the parties (or findings of the court) which the plaintiff can place before the CRU in a review or appeal.Perhaps the solution is to change the rules concerning the terms of notices of payment into court for personal injury cases so that the defendant has to declare the exact basis for the payment in to include stating a percentage for contributory negligence (where applicable) and the period of time and benefits paid by the CRU in their opinion as a result of the accident.To an extent this would balance the position between the parties as currently it can be seen that the defendant in any of the situations above is in a very strong position to the detriment of the plaintiff.It would also mean that the plaintiff could go to the CRU on a review or appeal and show that the parties were agreed upon the terms of settlement (something which cannot be stated at the moment and which, of course, leads to the uncertainty for the plaintiff).The third aspect is when the plaintiff continues to claim benefits.

The plaintiff's solicitor should be aware of this and can take action accordingly.

However, the defendants can exert pressure by taking their time over matters (albeit within the timetables set by the automatic directions).One way of overcoming this is to allow exemplary damages where the plaintiff can prove inordinate delay by the defendant which prejudices the plaintiff financially.

The plaintiff would, in reality, have to keep the defendant informed as the defendant would otherwise be able to say he or she could not realistically have acted any earlier as he or she did not know what kind of case there was to answer.It would appear the intention of Parliament is not being achieved thanks to the inflexibility of the rules relating to the practice of the CRU.

Any alteration to the rules should benefit both plaintiffs and the CRU without causing any disadvantage to defendants.For example, the rules relating to contributory negligence could be changed so that benefits to be paid back to the CRU are apportioned in accordance with the finding of the court or agreement of the parties.Alternatively, the rules relating to notices of payment into court could be altered so that they specify the percentage contributory negligence claimed by the defendant and/or the weeks and benefits allegedly paid in the defendant's opinion as a result of the accident.In addition, exemplary damages could be enforced where the defendant is guilty of inordinate delay prejudicial to the plaintiff's financial position.