Tuesday 17 July 2012 by John Hyde
Government plans to extend the RTA Portal from next year were today dealt a blow by one of its own advisers.
In a report commissioned by the Ministry of Justice, Professor Paul Fenn (pictured) accepts an extension is possible - but calls for a full review of the RTA process before it can come into force. Fenn concludes that government proposals to extend the scheme to public liability and employer's liability would have little effect to the outcome of those cases.
And any extension of the value of cases - which the government wants to raise from £10,000 to £25,000 - should offer more incentives for claimant solicitors, with damages and costs both having fallen since the Portal was launched.
The MoJ has previously stated it wants to extend the value and scope of cases falling in the Portal by April 2013. Fenn recommends that the current RTA process and the Fixed Recoverable Costs Scheme be jointly reviewed after another year once more data is available.
This review should consider the increased case workload from liability and quantum issues and establish an independent body to monitor costs and fees. Any assessment of the Portal should also take into account the effect of the referral fee ban, set to come into force by next April.
'Once an integrated system of fixed costs is in place for all low-value, non-litigated RTA claims, it could in principle be extended to other types and values of claim,' says Fenn.
Of more than 8,500 post-Portal claims made over a year, Fenn found around 50% subsequently exited the process, despite liability often being clear-cut. Where the case is more likely to be contested, such as in public liability and employer's liability, Fenn concluded a 'minority' of cases would be settled through the portal.
His report says the 6% reduction in damages was not part of the intended consequences of the Portal when it was set up in 2010, and may be due to the effect of fixed costs being independent of the settlement outcome.
It had been claimed when the Portal was set up by the MoJ that damages would not be affected.
Fenn, a professor at Nottingham University Business School, added that data collected through the Portal was not as useful as it could have been, partly because of the speed with which the scheme was set up.
An MoJ spokesperson said the government was still committed to the portal which 'encourages swift and efficient management of claims, limiting delays and keeping costs down'. The Fenn report 'has provided us with important groundwork as we look to expand the fixed costs scheme to cover more drivers and other areas of law'. An evidence-gathering exercise involving major claimant law firms, insurers, and the Law Society will examine some of the issues identified by Fenn, the MoJ said.