Agreement reached on fixed costs for road accidents

The Civil Justice Council (CJC) has brokered an agreement between claimants and insurers to set fixed costs and time limits for road accident claims.

The agreement, reached following a lengthy process of discussions and mediation, sets up a three-tier streamlined process, and will apply from April 2010. Only claims that can be settled for £10,000 or less will be included. Fatal accidents, accidents involving children, and accidents where contributory negligence is alleged, will be excluded.

The agreed fixed costs will be: £400 for Stage 1 (the claimant solicitor completes the claim notification form and sends it to the insurer who may admit/deny liability); £800 for Stage 2 (where liability is admitted, the claimant obtains a medical report and the process continues with offers and negotiation of a settlement to a strict timetable); and £250 paper hearing/£500 oral hearing for Stage 3 (where the parties cannot agree a settlement and the case goes to court).

Craig Butler, solicitor in charge of motor accident claims at Bond Pearce, says: “I’ve breathed a sigh of relief at what’s been agreed. The concern was that, if fees were driven too low, then claimants’ access to independent legal advice would disappear, but this is not a situation where claimant lawyers will have to shut up shop.

“I think there are gains to be made on all sides here. Insurers will make savings because of the reduction in litigation. The claimant may get speedier and fairer settlements, and has retained access to independent legal advice. For claimant’s representatives, the deal is not as bad as we feared, it is sustainable.”

Robert Musgrove, CJC chief executive, adds: “These predictable costs, together with the previously agreed costs and success fees, allow a significant proportion of the less complex injury claims to be resolved more quickly and proportionately.”