Ministry of Justice (MoJ) Reforms Guidance Document
Provided by Cowens Survival Capability
The Ministry of Justice (MoJ) are introducing a new insurance claims handling procedure from the 30th April 2010, and this places various statutory obligations upon lawyers and insurers. We have produced this newsletter to help you understand how the new process will operate and what this means.
The MoJ has decided that lower cost motor personal injury claims generally take too long to settle and claimant lawyer’s fees are too high and disproportionate to the level of compensation (Damages).
The process shown in the diagram applies to third party personal injury claims arising from road accidents happening on or after April 30th 2010, in England or Wales, if the estimated value of the claim is between £1,000 (Small Claims Court) and £10,000, excluding vehicle damage and hire. It does not apply if either vehicle is registered outside the UK.
- Claimants Lawyer submits claim notification to insurer via a website portal
- Insurer has 15 working days to respond on liability
- Failure to respond in time or disputing liability – claim leaves the process
- Liability admitted within 15 days – insurer pays fixed costs of £400 to layer and awaits next stage…
- Lawyer submits medical report and financial losses together with supporting documents and the claimants offer to settle
- Insurer has 15 days to respond
- Settlement agreed – claim concluded and Stage 2 costs payable (£800 plus 12.5% success fee)
- Settlement not reached – proceed to Stage 3
- Insurer has 5 days to respond to Stage 3 court pack
- Claim resolved by Judge considering evidence
It is essential that claims are reported by you at the earliest opportunity.
For notification of a new claim, please follow the procedures we have already agreed, if you are unsure how to report the claim please contact your handler or Account Executive 01623 649931.
Late notification of claims can result in increased claims cost that will directly reflect upon your policy experience, and may lead insurers to refuse to pay the whole or part of your claim.
Your Insurers will need access to information, drivers and witnesses during this stage.
Claimant submitting an offer is a new development, requiring the claimant to clearly state the amount acceptable in settlement (interim payments are also payable at this stage).
Further 20 days “negotiation” period available
Fixed costs of £250 for paper and £500 for oral hearings
100% success fee payable in the event judgement found in favour of claimant
- Once liability is admitted at Stage 1, it is binding on the insurer throughout the process.
- Admitting liability, before the start of the process, is not binding. This arises if a non-injury claim is already progressing for, e.g. vehicle damage or hire.
- Admitting liability for the accident does not prevent an insurer from raising fraud issues.
- Stage 3 costs are much lower than legal proceedings outside of the process.
- If a claim leaves the process, it cannot re-enter under any circumstances.
- Insurers will wish to keep as many third party claims as possible within the process.
- As the Motor Insurance Database (MID) will be used to help identify the relevant insurer, it is important to maintain this on an up to date basis.
- If the MID is wrong, by the time your insurer receives the third party notification claim, it may be too late to get the case into the new process.
- If you want any further information or help please contact your claims handler.