The defendant costs specialists

RTA claims process savings

By on Aug 25, 2010 | 1 comment

So, has the new road traffic accident claims process been a success from a defendant perspective?

This month’s edition of Litigation Funding refers to figures from AXA showing they are admitting liability within 15 days in 61% of cases and costs have fallen by £200 a claim.

Admitting liability promptly is obviously a crucial aspect of the process. It is perhaps unfortunate that this coincides with news that “cash for crash” scams are at a record high (see link) -  There is an obvious tension between trying to admit liability early and weeding out fraudulent claims. It may be too early to conclude whether any perceived costs savings have outweighed any additional fraudulent claims that have slipped through.

A more obvious problem appears to be the fact that it is surely too early to know whether there really has been an average saving of £200 per case. The scheme only applies to those cases where the accident was on or after 30 April 2010. We are only four months into the scheme. No doubt those claims that have settled this quickly have had average costs come in at a lower level than those recoverable under the predictable costs scheme.

If any claims have already managed to proceed as far as a Stage 3 hearing, they must be few and far between. When a significant number of claims start to get that far there will be an obvious spike in the cost of the average claim.

This is before we begin to consider the extent to which claimant solicitors seek to avoid the scheme entirely. The predictable costs scheme revealed the willingness of some firms to seek to play the system and issue proceedings at the first opportunity. It could be a good two years before these claims have settled, and the detailed assessment proceedings arguing over the costs have been concluded, before we know what level of costs will be recovered. Only then can average costs really be determined.

Added to all this will be the resources needed to fight the costs battles ahead.

It is probably somewhat premature to conclude what costs savings, if any, this scheme will produce.
 

    1 Comment

  1. The old PCR regime did indeed create a system that was ripe for abuse. Some claims for costs that I now see are nigh on legitamised fraud.

    How long before a similar system evolves on the new claims process?

    the key issue is, and always has been, judicial management. I dont see that this new claims process was required. If effective management had been forthcoming some firms would have been out of business a while ago i suspect

    Anon1

    25th August 2010

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