Norwich Union has proposed a way of dealing with personal injury claims that would revolutionise the current system. Andy Cook explains

At last month's Insurance Times Future of Personal Injury Claims conference, lawyers, insurers and others involved in personal injury claims voted that the way we deal with personal injury claims needed over-hauling. And Lord Falconer, the Lord Chancellor, speaking at the same conference unveiled the Department for Constitut-ional Affairs' (DCA) plans for reforming the ailing system. Just two weeks before, the Department of Works and Pensions (DWP) unveiled its National Vocational Frame-work for Rehabilitation.However, it will be two years before the DWP plan has any tangible effect on the way injured people are rehabilitated, which is at least half as well as they currently are in the US. And the DCA plan with its task groups and their investigations will also measure progress in years rather than months.Due to the slow pace of progress, and let's remember that greater use of rehabilitation has been on most insurers' Christmas list for a few years now, Norwich Union (NU) has decided to inject some pace into the proceedings. It has published its own manifesto for improving the personal injury claims process, which includes giving rehabilitation a boost. The manifesto argues that before claimant lawyers start racking up the hours and costs, the injured party should talk to the wrongdoer and see if liability can be settled. NU argues that in the majority of very small cases an apology and some flowers or chocolates would do, but that for injuries over £1,000 insurers/wrongdoers would find it in their own interests to admit liability wherever possible and avoid lots of costs. That would mean a huge reduction in the need for after-the-event insurance.Some experts say up to 60% of liability claims could be sorted out without much involvement from lawyers. Where liability is disputed, NU reckons that small cases should be sorted out by the Financial Ombudsman Service, as they are for other insurance claims. Larger claims, it adds, would need specialist personal injury lawyers. That means lawyers authorised to work in personal injury. "Just because a lawyer did someone's conveyancing, doesn't mean they are suitable for injury work," says NU head of technical claims Dominic Clayden. He adds: "Legal advice should be there when it is of value. In a vast majority of cases it is about process and transaction."NU proposes to boost rehabilitation by rewarding those who use it early and by penalising those who refuse it. IT For reaction to this story see pages 12-13 (Andrew Underwood and Fraser Whitehead). What do you think? Email: andy@instimes.co.uk

How Norwich Union's claims settlement proposals would workClaims up to £5,000

  • Raise the small track limit to £5,000. This means more than 60% of all county court personal injury claims would be covered
  • No legal costs are recoverable
  • A code to be devised that gives the wrongdoer the opportunity to accept responsibility and agree the process by which compensation will be valued
  • A code would also reduce damages by 10% for claimants who refuse rehabilitation and increase damages by 10% for claimants who are not offered rehabilitation
  • The potential compensator should give a decision on liability within 60 days of being notified of intention to claim
  • Contributory negligence will be void (not wearing seatbelts, helmets etc excepted)
  • Injuries to be assessed by GPs
  • Department for Constitutional Affairs to take over automated loss assessment system - compensators to access system on pay-as-you-go basis
  • Ombudsman to mediate on disputes - decision binds on wrongdoer but not claimant
  • Penalties apply to parties delaying process beyond six months
  • Claims to be made in 12 months of date of knowledge that a right of action accrues.

    • Claims between £5,000 and £50,000 The way of doing things is the same as for the under £5,000 claims except for the following:

  • Raise the fast track limit to £50,000
  • Claimant lawyers (who must be authorised specialists in personal injury) must do no other work than notify the claims. This means the wrongdoer can investigate and give a decision on liability while costs are still low
  • As risk will not yet have been calculated, there would be no need for after-the-event insurance
  • Wrongdoer will acknowledge the notification in 14 days
  • Rehabilitation will be treated as for small track claims but with 5% reward/penalty
  • Wrongdoer to give decision on liability in 90 days
  • Contributory negligence limited to 25%/50%/75%
  • Unresolved disputes are litigated
  • Claims lifecycles not to exceed 12 months.

    • Claims over £50,000The same code is followed as for small and fast track claims except for the following:

  • Insurers to work closely with injured people and their representatives, so they can immediately agree rehabilitation funding needs or develop tailored solutions.
  • NHS rehabilitation should be taken into the equation when looking at future care
  • The party that pays for services, contracts for the services
  • Claims lifecycles not to exceed 36 months.

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