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RTA Reforms and the Impacts on Legal Costs

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New reforms are being implemented in relation to claims arising from Road Traffic Accidents under the Civil Procedure Rules. These reforms have been confirmed by the Ministry of Justice to come into force on 31st May 2021 and are often referred to as the ‘whiplash reforms’. The RTA Reforms aim to reduce the number and cost of whiplash claims, which may result in lower insurance premiums. These RTA Reforms form part of the Civil Liability Act 2018.

The main changes to Road Traffic Accident (RTA) claims under the RTA reforms on 31 May 2021 are addressed below.

 

1. The RTA Reforms will Expand the Scope of Claims Which Fall Under the Small Claims Track Limit

Under the current process, a personal injury claim arising from a Road Traffic Accident where the value of the claim is under £1,000 will fall under the Small Claims Track. Where a case is dealt with under the Small Claims Track, this means that no legal costs are awarded to either party and a Claimant will therefore struggle to obtain legal representation. The RTA reforms will increase this limit from £1,000 to £5,000 in RTA Claims only.  By comparison, in EL/PL matters, this increase will be capped at £1,500.

This change means that in a Road Traffic Accident, your claim would have to be valued at over £5,000 in order for it to be dealt with by a Solicitor who is authorised and regulated by the Solicitors Regulation Authority.

There are some exceptions to this rule when the case can be dealt with under the Fast Track. These exceptions under the pre-action protocol include:

  • If the Claimant is a child or a protected party;
  • If the Claimants are vulnerable road users such as a motorcyclist or passenger
  • If, at the time of proceedings, the Claimant is an undischarged bankrupt or as a representative of a Deceased person
  • If, at the time of the accident, the Defendant vehicle was registered outside of the UK.

2. The RTA Reforms Will Introduce a New Online Portal

A new claims portal is being built by the Motor Insurer’s Bureau where low-value personal injury claims will be submitted, known as the official injury claim. It is being built around the idea that the Claimant will be able to submit their claim themselves using the online Portal without the need or assistance of a solicitor.

 

3. The RTA Reforms Will Provide New Whiplash Injury Tariffs

The new reforms will introduce tariffs to decide on how much compensation a person should receive for their personal injury, but these are significantly reduced on the current JC guidelines. These will apply to injuries lasting less than two years. The Claimant will receive between £235 to £3,910 for any tariff injury. When a set tariff is in place, this will minimise the level of expert evidence required in a case, such as medical evidence.

However, this does not mean to say that medical reports are not required. The general rule is that in a claim for whiplash, it will be essential for a medical report to be obtained in order for the claim to be valued accurately. An offer can be made on a case without a medical report where the injury is non-whiplash related, such as minor psychological injuries. This will mean that compensation will then be awarded under the higher tariff for injuries which include a psychological injury.

 

4. What are the Impacts of the RTA Reforms on Costs?

Under the current system, the costs of pursuing a case for Road Traffic Accidents where the value of the claim is more than £1,000, legal costs are recoverable pursuant to CPR 45. With this limit increasing to £5,000, it will mean personal injury Solicitors are likely to see an impact on workload.

Under the current regime, costs of Road Traffic Accident Claims are dealt with under CPR 45, relating to all RTA Personal Injury matters where the case is allocated to the Fast Track. The amount received usually varies based on whether the matter settles within the Portal or outside of the Portal, the latter of which allows up to an additional 20% of the damages recovered to be claimed as costs, aswell as disbursements in line with CPR 45.19 and CPR 45.29.

With the RTA Reforms not allowing for any costs to be recovered in cases where the matter is valued at less than £5,000, this will impact the level of costs that will be paid out in RTA claims. 

However, as stated above in order for compensation to be awarded, a medical report is required to quantify the injuries sustained whether the case is valued at lower than £5,000 or higher. So how will these medical reports be funded in cases with no legal representation or award for costs? The current discussions are to expand the scope of the med-co system to fund medical reports for Claimants who are unrepresented but where a medical report is necessary for their case.

For further information regarding the current RTA Claims process, please see our article here.

 

How can ARC Costs Assist?

ARC Costs are a team of costs draftsmen and costs lawyers who regularly deal with costs disputes across the legal landscape, including in fixed costs RTA claims and other types of personal injury matters.

We hold vast experience in the dispute of fixed costs claims, preparation of applications or Bills of Costs in cases where fixed costs apply, and in those cases which are subject to assessment. We can also assist in preparing Costs Budgets, negotiating legal costs and providing representation at any costs hearings.

If you have suffered an RTA injury which you believe could be valued in excess of £5,000 after 31 May 2021, we would also be happy to point you in the direction of a qualified Solicitor to assist.

Should you wish to discuss your case with us, please contact us on 01204 397302 or email the team at info@arccosts.co.uk. Alternatively, you may complete our online enquiry form (see below), and we will contact you as soon as possible.

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