Friday 01 June 2012 by John Hyde
The Law Society will refuse to support an extension of the RTA portal until there are major structural changes to the system. The Society has warned the government it will be impossible to extend the portal to include employer and public liability cases.
In its response to the Ministry of Justice's call for evidence on personal injury claims published today, the Society argues the portal is 'just about capable' of dealing with the existing RTA claims load. That burden will inevitably rise if the government succeeds in raising the RTA limit from £10,000 to £25,000.
'There can be no assurances that the portal will cope with an additional major increase in use if employer's liability and public liability claims have to be made through it,' said the response.
'The existing structure was put together in a rush and, although its performance has improved considerably, we would not wish the same rush and risk occurring again.'
Justice ministers are believed to be keen on slashing the £1,200 maximum solicitor's fee for each case going through the portal. Based on a survey of personal injury firms, the Law Society found the lowest base cost of running an RTA portal case is currently £866.33. This is based on a median of 10 hours spent by claimant firms on each case.
The Society's response calculates that solicitors will have to earn £974.96 per case if they want a 10% profit, although this might not be sufficient incentive for firm owners to take on the risk involved in each case. It estimates a 20% mark-up, resulting in a £1,063.60 fee, would be the most appropriate.
The Society points out that, in real terms, guideline hourly rates have already reduced by 7% since 2010 - with the savings directly benefiting insurers. The response also questions how easy it will be to extend the upper limit of claims in the portal.
According to the Judicial Studies Board guidelines, the range of damages for minor brain damage is £10,000 to £28,500, whilst orthopedic injuries at this level are likely to require more than one medical report.
The whole process for higher-value claims will incur more time and costs - on average cases between £10,000 and £25,000 take 24 hours - and the Society states this must be reflected in the fees payable.
The Society also recommends the 15-day limit for insurers to respond to claims should be retained. It added that insurers not responding in time is the most common reason for cases dropping out of the portal.
The MoJ said it will publish a response to the consultation this summer.