The Social Security (Recovery of Benefits) Act 1997 came into force in its entirety on 6 October 1997.

An article in the Gazette (see [1997] Gazette, 23 July, 30) gave an introduction to the changes made by the Act.Two sets of regulations have now been made filling in the detail of the primary legislation.

These are the Social Security (Recovery of Benefit) Regulations 1997 (SI 2205/1997) and the Social Security (Recovery of Benefits) (Appeals) Regulations 1997 (SI 2237/1997).

Practitioners will need to study the detail to get on top of the new scheme.AppealsThe appeals regulations are straightforward.

They provide for the procedure to be followed in appealing against a decision of the Compensation Recovery Unit (CRU) to recoup benefit and the applicable time limits.

It is only possible to appeal against the calculations set out in the certificate, or the fact that benefits listed in the Act and included in the CRU certificate were not paid in consequence of the accident, injury or disease.

There is no right of appeal against the exercise by a compensator of the right of set-off given in section 8 of, and schedule 2 to, the 1997 Act.

It seems that the only method of challenging the compensator on that issue is to take the case to trial or to settle and then sue for a declaration that the set-off was incorrectly applied by the compensator.

But there may be problems with funding such challenges if the amounts in question are small.Payments into courtThe principal difficulty with the new regime identified by practitioners concerns payments into court.

The previous law spelt out the method and consequences of a payment into court including, in particular, a requirement that in most cases the compensator should not make a payment in until the CRU had provided a certificate showing the benefit to be recovered.The compensator would then deduct this sum from the payment in.

Yet for costs purposes, the payment in would be treated as the aggregate of the cash paid in and the amount retained.Under the new regulations, the position is not so clear.

For reasons that are hard to understand the regulations are not complete in themselves and the Lord Chancellor's Department (LCD) and the rules committees have yet to consider whether amendments to the rules of court will be needed.

Regulation 8 deals with the topic.

It says very little about the mechanics of a payment in.

It does not make clear whether the payment in is to be net of any set-off exercisable as above.

After discussions with the DSS and the LCD the Society believes that what was intended is that all payments in should be net.

The CRU's advisory booklet now being sent out to all solicitors says so.Further, to beat the payment in, it seems that the plaintiff must recover as the total award the aggregate of the cash in court and the amount of the set-off.

In cases where no set-off is capable of being applied, none of these complications arises.

Rules of court or new court forms clarifying the position may be introduced in the near future.

The Law Society is strongly advocating this.There is no provision in this Act or regulations for the payment to be broken down, or even for the amount of any set-off to be calculated and the mathematics to be explained to the plaintiff.

The government decided against making this a requirement after lengthy debates during the passage of the Bill, on the basis that this should be left to negotiations between the parties.

But, the plaintiff's advisers will often need to ask for the basis of the payment in to be made clear.

There may be costs implications for those defendants who decline to co-operate in clarifying details but that will be for the courts to decide.Other aspects worth noting are:-- There are extremely complicated provisions about interim payments and recovery.

The broad principle is to ensure that each interim payment is accompanied by a refund to the CRU of benefit paid to date.

The regulations on set-off and recovery where a number of interim payments are made in one case are complex.

The CRU advisory booklet helps by giving examples.-- There are transitional provisions relating to cases where court orders or judgments or agreements between the parties on liability and quantum were made before 6 October but payment not made in settlement by that date.

Any post-6 October payment made in such a case is governed by the old, and not by the new, law.

A payment into court made before 6 October but where the 21-day period for acceptance expires after that date is also treated as subject to the old law, if the payment in is accepted within that period.

But, if the 21-day period has already expired in the case of a pre-6 October payment in, the new law applies to the money in court.

This may result in some difficult issues of set-off and deduction to which the regulations provide no clear answers.

In many cases defendants may wish/need to recalculate and adjust the payment in to protect their costs positionTo request a copy of the CRU booklet, contact the Compensation Recovery Unit, Reyrolle Building, Hebburn, Tyne & Wear NE31 1XB; tel: 0191 225 8507Practitioners with other particular difficulties about the operation of the new scheme are invited to contact Suzanne Burn, secretary to the Law Society's civil litigation committee, 113 Chancery Lane, London WC2A 1PL Telephone: 0171 320 5739/Fax: 0171 320 5673