An Electronic Era
The MOJ RTA Claims Portal – is it effective?
Local Authorities and risk managers will all be familiar with the new Ministry of Justice RTA claims process which came into force on 30 April 2010 which applies to all claims arising on or after that date. The intention behind the process was to provide a more streamlined procedure for resolving low value RTA cases and for compensation to be provided quickly. It was also aimed at reducing costs and to encourage more claims to settle overall.
According to the MoJ, road traffic accident personal injury claims valued between £1,000 and £10,000 formed around 75% of all personal injury claims which now fall in the scope of the new process. Within the first three months of the introduction of the RTA process 113,000 claim notification forms had been created and the majority of solicitors and insurers were using the system. It is expected that the portal will manage up to half a million low value RTA claims per year.
Background
The new process applies to RTA cases where damages are valued between £1,000 and £10,000 (excluding vehicle related damages) and either the Defendant admits liability or the only issue in dispute is contributory negligence for the failure to wear a seatbelt. If liability is denied the claim exits the process. There are fixed stages and costs with set deadlines for Claimants and Defendants. Up until the 30 April 2010 Defendants had between 60 to 90 days to accept or deny liability, whereas under the new rules it is reduced to just 15 days.
The central basis of the new process is that the claim is managed electronically via either a web browser based access to a secure web server or via ‘application-to-application’ interfaces. This is to allow for a swift exchange of all claims information and related documentation.
How is it working?
Many Local Authorities undertook a great deal of work (at some expense) to be ready for the launch.It is reported that the electronic element of the process has caused a number of problems.
Initially there was a delay in many system users receiving log-in details and where users had login in details there were still problems logging on to the system or with the system crashing. The problems have been put down to ‘teething problems’ which, as we know, many new technology initiatives suffer from. As a result there are now support functions within the portal (a troubleshooting tab and a ‘Help Desk’).
It has been reported by some Claimant firms who are using the portal that there have been positive impacts on timescales in those individual cases. It has been said that in some cases, claims can be investigated and liability admitted on the same day as receiving the claim notification form, which seems to suggest that the MoJ’s aim of speeding up the process is working in practice. This is positive news for Defendants and particularly Local Authorities as this will clearly limit costs and allow the matter to be dealt with swiftly.
However, there do appear to be some problems with the new process. One issue is that the system, from the Defendant’s perspective, is that only the Claimant is permitted to obtain a medical report; there is no provision to allow the Defendant to do so. This means that the Defendant has no input regarding the medical expert that is appointed to prepare the report. The medical report forms the basis on which quantum is assessed. The process does not allow the Defendant’s to have the option to obtain a second medical report if required.
A further issue arises in relation to fraudulent claims which will often require further time to investigate. These types of claims will almost always exit the process as liability will initially be denied with time required for detailed investigations.
So what if parties decide not to use the portal or make attempts to purposely break out of the procedure to avoid the constraints? If at any point the claim falls out of the process, for example the Insurer does not admit liability within the 15 day time limit, then the claim cannot re-enter the process. The process will only work if both parties abide by the time limits. It remains to be seen whether judges will penalise those Claimants who deliberately fail to use the system and how the Court will deal with this.
Costs
Another aspect of the process concerns the fixed costs which the Defendant must pay after they have admitted liability. For claims valued at the lower end of the scale (around £1,000) the Defendant will pay costs of £1,200 even though under previous predictable costs regime this would have only been £1,000.
However, as the value of the claim increases, the more favourable it is for Defendants, as the costs will remain fixed at £1,200 even if the claim is worth £1,000 or £10,000. This cost certainty is clearly helpful as it sets out the total costs payable to the Claimants Solicitors which are clearly identifiable in advance of any action (provided the process is followed).
Conclusion
Despite the early teething problems, mainly due to technology issues, it does seem that the new RTA claims process may be starting to meet its objectives of streamlining set by the Ministry of Justice. There is evidence to suggest that the claims are being admitted quicker due to the claim notification process and form. This in turn will reduce costs and overall claim spend.
It will be interesting to watch how the process shapes up and how the Courts will approach costs in cases where deliberate attempts have been made to exit the process.