Important Changes to the Civil Justice Rules

Background

A number of civil justice reforms will be implemented in April and July 2013 which will radically reform the litigation landscape.  These changes will have a significant impact on the timescales for investigating and commenting on liability claims.  Significant cost savings are also anticipated due to a number of amendments to how claims are funded.

What You Need To Know

• Success fees and After the Event Insurance premiums will no longer be recoverable by the losing party where new funding arrangements are entered into on or after 1 April 2013
• There will be Qualified One-Way Costs Shifting (QOCS) for personal injury claims. This means that, save for certain situations, costs will not be payable by an unsuccessful claimant to a defendant. This comes into force on 1 April 2013 for claims funded by the new arrangements
• under the new rules there will be an increase of 10% in General Damages (pain, suffering and loss of amenity) to balance the non-recoverability of success fees from the paying party
• All Employers', Public and Product Liability bodily injury claims (valued between £1,000 and £25,000) will be dealt with via an electronic portal. The exception will be any disease claims where there is more than one defendant
• Letters of claim and postal claims will be replaced by Claim Notification Forms (CNF)
• The majority of Employers' Liability CNFs will be sent directly to the insurer. However Public and Product Liability notifications are likely to be sent directly to policyholders

Timescales

Once a claim is notified, there will be strict, non-negotiable deadlines to be adhered to:

• CNFs must be acknowledged electronically within 24 hours
• From receipt of the CNF, liability decisions must be made within 30 business days for Employers' Liability and 40 business days for Public and Products Liability
• For Employers' Liability claims, once an admission of liability has been made, there will be a period of 20 business days in which to confirm loss of earnings
• Once a full admission of liability has been made, there will be a period of 35 business days in which to negotiate settlement
• It should be noted  that any arguments of contributory negligence will automatically exit the claim from the portal

In the event that any of the above deadlines are missed, the claim will automatically exit the portal and attract higher costs.

What Can You Do?

Given the much shorter timescales to acknowledge and investigate claims and make liability decisions, speed will be of the essence.  Below are som practical steps you can take to ensure that you are prepared for the new reforms:

• Focus on detailed, accurate capturing of information when an incident occurs
• Ensure documents are properly archived and therefore readily available upon notification of a claim; this will ensure a swift decision on liability can be made
• CNFs for Public and Products Liability may be sent directly to you. It is essential that these documents are forwarded to your insurance broker so that none of the crucial timescales are missed
• Consider internal training and update your processes
• Put strong counter-fraud procedures in place so that you can work with your insurers to identify which claims should be resisted
• Review claims defensibility processes to ensure that they are sufficiently robust to cope with the forthcoming changes

Useful Resources

You can find full details of all of the changes at:

http://www.justice.gov.uk/downloads/publications/policy/moj/civil-justice-reforms-full-package.pdf