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Information for companies - Ministry of Justice Reforms to EL and PL Insurance

Published: 30/09/13

As of 1 Aug the 2013 Ministry of Justice (MOJ) has introduced reforms designed to speed up the process of handling liability claims whilst eliminating disproportionately high legal costs.

The MOJ reforms radically alter the way Employers' Liability (EL) and Public Liability (PL) injury claims are managed by introducing new, tighter timescales and fixed costs, with cost penalties for non-compliance.

These relate to accidents occurring on or after 1 August 2013 in England and Wales. This applies to:

  • • EL and PL personal injury claims (except EL disease where there is more than one defendant, and all PL disease) valued from £1,000 up to £25,000 will be transacted via an online electronic portal.

 

The Portal, which is already in existence for Road Traffic Accident claims with an expected settlement under £10,000 is intended to compress the claims process and limit solicitor’s costs. Within the new proposals, an FRC (Fixed Reduced Cost) banding will be introduced for the majority of personal injury claims valued at between £1,000 and £25,000.

Handling as many claims as possible within the portal will help ensure that legal costs are kept to a minimum. But this does mean you will need to fully investigate every incident promptly, so insurer’s claim teams can:

  • Determine if a claim is valid and a compensation payment due, or

  • Secure the evidence available to defend the claim

  • It is important that you provide insurers with the information they need, within the timescales prescribed, to enable the right decision on legal liability.

  • There are strict timescales and actions that you will need to take.

 

What you need to know
The claim process starts when a CNF (Claims Notification Form) is received either by you within the company or your insurer.

Whoever is in receipt of this has 24 hours to acknowledge it. So you need a dedicated individual to take responsibility for these communications and ensure that this information is dispatched to your broker or your Insurers as soon as it is received.

It is however assumed that claims will generally be notified by the claimant’s solicitor via the portal to the relevant insurer. Claimant solicitors must use the Employers’ Liability Tracing Office (ELTO) database to identify the relevant EL Insurer.

Once a claim is received, the defendant policyholder (or more usually insurers on their behalf) must confirm whether liability is accepted within 30 days for EL and 40 days for PL. Previously there was a 90 day period to respond.

If defendants do not respond within the deadline the claim will ‘drop out’ of the portal and increased legal costs are payable.

Immediate accident investigation, evidence gathering and reporting are essential to ensure that the right decision is made within the deadline. You must therefore have robust accident and incident management systems and reporting procedures in place. These need to be done in enough time for insurers to appropriately respond.

Once the liability decision has been communicated further deadlines apply to settlement negotiation and failure to comply again come with costs sanctions. 

What you need to do:
Arista Insurance has kindly provided the following step-by-step guide as to what you must do upon notification of an accident. They list their documentation, but your insurer will have similar forms – if in any doubt contact your Flint account handler for help and advice.

Step 1 - Inspect accident scene including any work equipment and take photographs.
Obtain, secure and remove or isolate from use, as far as possible, any defective equipment/premises allegedly causative of the accident. If CCTV footage is available, retain permanent copy for day/time of incident.


Step 2 Complete Accident & Investigation Report
Describe what happened; give as much factual detail as you can. Identify any discrepancies; doubts of uncertainties by avoid speculation or opinion.


Step 3 Use Witness Statement form to record all witness evidence. 
Interview the injured person and record their account, signed and dated if possible. Identify any other witnesses and record their accounts, ensuring that they are signed and dated .


Step 4 Complete Health & Safety Executive (HSE) forms if the incident is notifiable to the HSE, and retain a copy for insurers.


Step 5 Complete Pre-Action Document Disclosure Mandate Form
It is important to collate and attach all relevant documentation as the claimant’s solicitors will request documentation when a claim is presented to you and you must make documents available. These may include:
Accident report forms, HSE forms, written findings of internal investigations, training records, evidence of supply and use of Personal Protective Equipment, maintenance logs for premises/equipment, risk assessments, etc.
The MOJ Civil Procedure Rules contain a pre-action personal injury standard disclosure list which you can access at http://www.justice.gov.uk/courts/procedure-rules/civil/protocol/prot_pic#IDA23KCC


Step 6 Complete Earning Schedule  if the accident involves an employee. Identify the period of absence and attach copies of Statement of Fitness to Return to Work Notes, to form 4.


Step 7 Once investigation is complete, notify your insurance broker/insurer and retain copies of all completed records, statements and documentation in a secure place.
Obviously following any accident you must take steps to prevent reoccurrence; and should probably conduct risk assessment pre and post accident if changes made.

Stage

Description

Action

Timescales

Stage 1

Notification & Investigation

Claim Acknowledgement

24 hours

Insurers to investigate & accept/defend EL

30 Business Days

Insurers to investigate & accept/defend PL

40 Business Days

Stage 2

Quantum

Stage 1 fixed costs

10 Business Days

Any Counter Offer

15 Business Days

Conclude Settlement

35 Business Days

Payment of Final

10 Business Days

Stage 3

Court

Hearing

After 35 Business Days

 

 

 

 

 

 

 

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