The Civil Procedure (Amendment) Rules 2010 and update 52 come into force on 30 April. This article is confined to a summary of the most important aspects of these amendments, namely the new Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (the RTA Protocol). All lawyers who handle personal injury claims need to be familiar with this new process.

The RTA Protocol is more proscriptive than other protocols. It has ‘teeth’ and is supported not only by its own practice direction, PD8B, but by various amendments to the Civil Procedure Rules and other PDs. Generally, when lawyers familiarise themselves with procedural changes, the best starting point is the rules themselves followed by the supporting PDs and finally by reading the relevant protocol.

In this instance that process should be reversed. Start by reading the RTA Protocol itself, which describes stages 1 and 2 of the new process. Then read the new PD8B – Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents – Stage 3 Procedure. Finally, consider the amendments to the CPR, noting in particular the new section II in part 36 (rules 36.16 to 36.22) – RTA Protocol Offers to Settle and the new section VI in part 45 (rules 45.27 to 45.40), which contains the new fixed-costs provisions.

Key features1. The RTA Protocol applies only to personal injury claims where the claim for general damages (pain and suffering and loss of amenities) exceeds £1,000 but does not exceed £10,000. The value of any special damages claim is irrelevant.

2. The RTA must have occurred on or after 30 April 2010.

3. Liability is admitted. This is important. If liability or contributory negligence (other than mere failure to wear a seat belt) is in issue, the new process does not apply and the existing procedure is unchanged.

4. It is a streamlined process in three stages. It is hoped that most claims will settle at the end of Stage 2. The court is only involved at Stage 3.

5. Information must be exchanged electronically on new prescribed forms. In particular, the new Claim Notification Form (form RTA 1) will replace the letter of claim.

6. Quicker compensation for claimants. Most claims should settle during Stage 2 and the claimant will be paid. This can include an interim payment of £1,000 during the Stage 2 process. Furthermore, if the claim does not settle and proceeds to Stage 3 not only must the defendant make an offer in the Court Proceedings Pack (Parts A and B) – forms RTA 6 and RTA 7 – but must also pay the amount of the final offer (less any previous interim payment and any deductible amount payable to the Compensation Recovery Unit). See paragraph 7.61 of the RTA protocol.

8. Improved cash flow for solicitors by fixed payment of costs at the end of each stage.

9. A fixed-costs regime. This is set out in the amended part 45. The figures are: £400 at the end of Stage 1; £800 at the end of Stage 2; and £250 at the end of Stage 3 (plus a further £250 advocate’s fee if relevant – see below). To these fixed costs can be added the prescribed disbursements (see rule 45.30) plus, in a conditional fee agreement case the ‘success fee’ of 12.5% on Stages 1 and 2 and 100% for Stage 3 (but see next paragraph).

10. Compulsory Part 36 offers. Both parties must state their final offer on form RTA 7 (Court Proceedings Pack-Part B). The new rules in part 36 (see rules 36.16 to 36.21) are very straightforward. As usual the court will not know the amount of the offers until the claim has been decided. There are three possible mutually exclusive outcomes of the Stage 3 hearing. In Outcome 1 the judgment equals or exceeds the amount of the claimant’s offer. The claimant will be awarded the fixed costs in rule 45.32 plus interest on those costs (at a rate not exceeding 10% above base rate) and interest on the whole of the damages (also awarded at a rate not exceeding 10% above base rate: rule 36.21).

Where relevant, there will also be the 100% success fee on Stage 3 costs. In Outcome 2 the judgment does not equal or exceed the claimant’s offer but does exceed the defendant’s offer. The claimant will be awarded the fixed costs in rule 45.32. Because the claimant has beaten the defendant’s offer, the success fee in a conditional fee agreement (CFA) case is still 100% (rule 45.31). In Outcome 3, the judgment equals or is less than the defendant’s offer. Here the claimant will be ordered to pay the defendant’s fixed costs (rule 45.38) and interest on those costs (rule 36.21 (4) (c)) plus, if the defendant is funded by a CFA, a success fee of 100% of the defendant’s Stage 3 fixed costs (rule 45.31(4)).

11. The aim of the new process is to encourage realistic offers by both claimants and defendants.

SanctionsThe main sanction is in costs. A claimant who has failed to follow the RTA Protocol will not have benefited from the streamlined process and will have incurred more costs than would have been incurred if the protocol had been followed. Nevertheless, the court ‘may order the defendant to pay no more than the fixed costs in rule 45.29’ (see rule 45.36(2)).

If the defendant fails to comply then the claimant is entirely justified in leaving the process and commencing proceedings under part 7, CPR where the court will summarily assess the costs as now thus depriving the defendant of the lower cost of the new process.

Stage 1The claimant’s solicitor will send a claim notification form electronically to the defendant’s insurer at the address to be found at www.rtapiclaimsprocess.org.uk (see paragraph 5 of the RTA Protocol).

This is the claim notification form in form RTA 1. (Form RTA 2 is also sent direct to the defendant.) This form must be completed fully and with care. The insurer has 15 days to respond. If the response admits liability, the Stage 1 fixed costs must be paid within 10 days of the response. If the insurer does not respond, denies liability, alleges contributory negligence (other than mere failure to wear a seat belt), or asserts that the information in the CNF is inadequate, then the claim exits the process. In the last instance (inadequate information) beware the costs sanction if the defendant is correct. If the claim exits the process, the claimant can proceed under the existing procedure.

Stage 2Liability having been admitted, the claimant’s solicitor may now obtain a medical report. When ready to value the claim the Stage 2 Settlement Pack is submitted. This includes: the medical report; receipts or other evidence of special damages; receipts for disbursements; and the claimant’s valuation of the claim. The defendant must respond within 15 days and either accept the claimant’s offer or make a counter-offer. If the claim has not settled there follows a ‘negotiation period’ of 20 days. (The 15 days response period and the 20 days ‘negotiation period’ are together referred to as ‘the total consideration period’. This period can be extended by agreement.) Negotiations can take any form. See further paragraph 7 of the RTA Protocol. In addition to the Stage 2 Settlement Pack in form RTA 5 there is also an Interim Settlement Pack in form RTA 4 to be used if an interim payment is requested where the claim cannot yet be valued.

Any offer by the defendant includes and cannot exclude the Stage 2 fixed costs. Most claims will settle in Stage 2 and that should be the aim.

Stage 3If the claim has not settled proceedings are issued under part 8, CPR in accordance with the new PD8B. There is an automatic interim payment (see above). Before issue at court, the claimant completes the Court Proceedings Pack (Forms RTA 6 and RTA 7) and sends it to the defendant to check for accuracy. No new information or evidence can be included. The pack includes both parties’ comments on disputed heads of damage and both parties’ final offers. The defendant has five days to check the pack. The claimant then issues. The claim form is served; the defendant acknowledges service on new form N210B. The court will notify both parties of the date when the district judge will assess damages.

Paper hearingParagraph 11.1 of PD8B envisages that the assessment of damages will be a paper exercise. Neither party can attend. However, either party can request an oral hearing but even if there is an oral hearing it is confined to submissions only. No further evidence is permitted and the judge will value the claim using only the same papers that were before the parties.

Further questionsThis article is only a summary of this important new process. No doubt many questions have arisen (for example, does it apply to claims by children? The answer is yes. Does it apply to protected parties? The answer is no). Whatever your question, it is answered in the RTA Protocol or in PD8B or in the amended rules. The aim of this article is to give a basic understanding before further research.

Will it work?The RTA insurance industry estimates that 500,000 cases each year will proceed through this new process. Averaged out over working days that is 2,000 new cases every day. In fact, it is likely that there will be many more CNFs served daily than this, because it is not always clear whether liability is going to be admitted. Of course, one advantage of an e-process is that the CNF can be sent any time, any day and not just during the normal working day. The new process is not a result of Lord Justice Jackson’s recent costs review. The Ministry of Justice has spent over two years in discussions and planning and intends that the new process should work. If the IT is sound, there is no reason why it should not work. There are clear benefits all round.

Whether this process proves to be just a ‘one-off’ or is the thin end of a very long and very thick wedge only time will tell; but it is the most significant procedural development since the CPR came into force.

District Judge Robert Hill sits at Scarborough and Leeds county courts. He is a member of the Civil Procedure Rules Committee and was a member of the sub-committee which drafted the RTA Protocol and the consequential changes