The structure of catastrophic injury awards must be rethought. Lord Hunt calls for joined-up thinking from industry nd government
At a recent conference organised by my firm's national catastrophic injury unit, the need to improve the outcome for those who have been very seriously injured, through better rehabilitation, care and support, was widely acknowledged. Claimants deserve the best methods available to meet their needs. These include speed and expertise in handling the claim. How can we all work together to achieve these common goals?
In any severe injury claim, the major financial component (and often the most contentious element in the litigation) is the cost of future care for the claimant's projected life span. Historically, the court has made a single award for all damages, although, more recently, there have been moves to encourage periodical payments, such as structured settlements. Much will depend on the government's own response to consultation on periodical payments.
For the NHS, structured settlements ease short term Treasury concerns by transferring the bulk of costs to future years. For all defendants, they also take away some actuarial gambling on life expectancy. But, assuming that actuarial projections are generally correct, they do not reduce overall long-term cost.
The root of the problem is the need to provide a large sum for the claimant's family to purchase a care package. Each claimant is a first-time buyer in a poorly regulated market and cost and standard of care is not always consistent.
However, with a national system to cater for future care and support claims, early arrangements could be made by defendants and would ease the burden for all concerned.
It would also enable judges to exclude this element of the claim from their considerations, or at least enable them to specify a level of care to which the claimant would become entitled. The reduction in the scope of litigation would considerably speed up the process.
This is an invaluable opportunity for the industry and government to work together. The insurance industry has long acknowledged its liability for providing proper compensation for seriously injured claimants. Government is at last acknowledging the need for ownership of the rehabilitation concept. The NHS has the expertise in case management, although not necessarily the funds.
Insurers have transformed themselves into buying organisations: it is increasingly common for the insurance solution to be restitution, rather than a cheque. The ability of insurers to offer a range of care packages would have considerable benefits:
Any departure from the conventional lump sum system must have built-in safeguards, to protect the claimant's entitlement to compensation. But it is a relatively small step from that to a system that provides benefits in kind.
There has been much talk of "joined-up thinking" between different government departments on rehabilitation and provision for injured claimants. It is tempting for some, facing rising NHS charges in RTA claims and their possible introduction in other injury claims, to view government and NHS as adversaries. Isn't it now time for "joined-up thinking" between government and the insurance industry?
Lord Hunt is senior partner at national law firm Beachcroft Wansbroughs