The majority of Employers Liability or Public Liability claims for personal injury with an expected value of less than £25,000 which happened after 31st July 2013 now have to follow the rules set out ‘the new protocol’. This protocol prescribes the use of the Claims Portal. The Claims Portal is split into three stages. The first stage is where the claim is submitted to the other side for their liability decision. If the claim is admitted within the prescribed time frame, with no allegation of contributory negligence, it will then progress to Stage 2. This is where the Claimant will submit their medical evidence and evidence of monetary losses and negotiations between the parties take place. If the parties cannot agree a settlement then the claim will then progress to Stage 3 where a judge will decide the award the Claimant should receive. The judge will have no knowledge of the previous offers made by either of the parties.
Before the Claims Portal, Defendants were heavily incentivised to settle a claim as early as possible following an admission of liability because generally the longer they took to settle the claim, the more costs they would have to pay the Claimant’s Solicitors. Furthermore if the parties could not agree, then the case would progress to a disposal hearing. This was an expensive process due to Court Fees, Advocate Fees and costs of preparation. The Defendant therefore had a strong incentive to make good offers to the Claimant to ensure the claim would settle.
Under the new rules, if a claim goes to Stage 3 fixed portal costs apply, furthermore the Court fee and advocate fee are fixed and are general a lot lower than they would have been previously. This means the Defendant knows exactly how much additional costs they will have to pay if they progress to the Claim to a Stage 3 hearing and subsequently lose. The amount differs slightly due to the type of claim but is significantly lower than what they would have paid before. The incentive to settle early is therefore diminished somewhat and Defendants are more inclined to try and settle the claim as low as possible. It seems a pattern has emerged where Defendants make low offers within Stage 2 because Claimants will unfortunately often accept a lower a settlement for fear of a Judge awarding them even less at a hearing. Claimant representatives will always explain to the Claimant the value of their claim and advise them whether to accept an offer or not however they also have to advise of the risks of progressing to Stage 3 no matter how small these risks are and unfortunately Claimants often feel this is too much of a gamble. The Defendant has little to lose by going to Stage 3.
I have had a personal experience of a scenario where the Defendant continued to make offers much lower than the value of the claim throughout Stage 2 and the claim therefore progressed to Stage 3. At the hearing the Claimant and Defendant representatives took turns to present their valuation of the case. The Defendant advocate valued the case £500 higher than the last offer made to the Claimant. This clearly shows the Defendant knew the offers they were making were lower than the value of the case and had not actually made any reasonable offers, forcing the Claimant to go to Stage 3. Needless to say the Claimant won at the hearing however had the Defendant made reasonable offers earlier in the case the Claimant would have obtained her damages significantly earlier and the Court’s times wouldn’t have been wasted. Behaving this fashion is in direct conflict with the overriding objective as is incredibly unfair to Claimants, many of whom would have ultimately accepted a lower offer, despite best advice given by their representatives for fear of the grave repercussions on the Claimant should they lose at Stage 3.