Terminology gets in the way of understanding how to obtain compensation for personal injury. I will do my best to explain.
Understanding personal injury terminology
Do please remember we are trying to help you understand the terms used, so do not rely on our explanations to make a decision. They are explanations and not legal advice.
After the event insurance
After the event insurance was developed to support Claimants who enter into a conditional fee agreement (CFA or no win no fee) with their solicitor.
Your own solicitor is only entitled to payment if your case succeeds, but if you lose you are liable to pay your solicitor’s disbursements and the other side’s legal costs. You can take out after the event insurance to cover these liabilities.
The insurance operates very much like legal expenses insurance. The insurer must be satisfied as to the prospects of success.
Insurers may agree to defer the premium payment until the case ends and some even insure the premium in case you lose
Compensation is the general term used for damages. Damages are the payment the law allows to put you back in the position you were, so far as that is possible in terms of money, before an accident.
Compensation for personal injury is divided into general damages and special damages.
General damages are for the non-monetary aspects such as pain suffering and loss of amenity (the things you canno longer do).
Special damages are for the financial effects of an accident such as past and future earnings loss, care, medical expenses and alterations to your home.
Compensation Protection Trust
Compensation protection trust is another name for a trust which holds personal injury compensation.
Other names are personal injury trust or special needs trust.
The regulations for most means-tested benefits state that a payment in consequence of a personal injury may be held in a trust and ignored for benefit purposes. The regulations only mention a trust. These various terms simply describe trusts which hold personal injury compensation.
Claimant is the person bringing an action for compensation following personal injury in an accident. The term claimant is used on the Court documents. The other party to the action is the defendant.
Contributory negligence is a finding made against a successful Claimant who is found to have contributed to their own injury.
Your case will succeed if you can show you were injured by someone who did not take reasonable care for your safety. They might be able to show you were partially to blame, and therefore contributed to the injury.
Your contribution is assessed as a percentage. That same percentage is knocked off your compensation. That may sound fair enough, but the effect can be tough.
Losing 50 per cent of a £2,000 claim is not the end of the world, but in a larger case, where most of the compensation is ear-marked to pay for long term care, losing even a small percentage for contributory negligence, can be very expensive indeed.
Even if liability is admitted in your case, contributory negligence can still be argued against you. An admission of liability alone does not mean you will receive full compensation. You need confirmation that contributory negligence is not to be argued.
A simple example is a car and pedestrian road accident. The car should have been driven in such a way that the driver could safely stop or avoid anything or anyone in its path. If a pedestrian is hit by a car on a road, the pedestrian will usually succeed. The closer the car is to a pedestrian when the pedestrian steps into the road, the more likely is a finding of contributory negligence against the pedestrian.
A regular argument against the claim of a motorcyclist is speed. “I did not see you” says the car driver, but if you were going slower I would have had more chance to see you. Contributory negligence is often agreed and, if not agreed, assessed by a Court.
Contributory negligence is often used in negotiations as a way of persuading a claimant to accept less than the full value of their case. In a case where contributory negligence has not been agreed or decided on by a Court, you will always have this argument nagging at you when negotiating, or at trial. Do not be quick to accept contributory negligence, but you must also be realistic about your part in what caused the injury.
The test for negligence is not high. Have you failed to take reasonable care for the safety of someone else? That is the test and a low standard of proof is applied, called the balance of probabilities, which means is something more likely than not. So it is not difficult to show someone is at fault, but on the other side of the argument it may not be difficult to show you have contributed.
Someone driving a large heavy metal object, such as a car, must take more care than the pedestrian. An employer has responsibility for the work place and equipment, so carries that additional level of responsibility.
Examples of cases involving contributory negligence are available.
Costs – legal costs – fees
These terms are used to mean the total expense incurred by using a solicitor when you bring a case against another person or organisation, called the third party or defendant. The costs are made up of three elements which are fees, disbursements (expenses such as medical reports and Court fees) and VAT. Your fees are usually based on the hourly rate of your solicitor and members of the solicitors staff. The solicitor will also incur expenses, often called disbursements, such as obtaining a police or medical report, Court fees and payments for access to data such as medical records. A barrister may be engaged, and the expense will form part of those disbursements. These items can add up.
In many personal injury compensation cases the costs are fixed, but in others the amount for which you are liable as a client and recovered from the other side, are subject to vague tests of reasonableness and proportionality. If your case succeeds, it is usual for the Defendant to pay your costs. The Defendant will cover your liability to pay your solicitor, subject to a test of what was reasonable and necessary. You must be liable to pay your solicitors fees, and on the basis of that liability the other side will cover those costs. Even on a no win no fee agreement, you will be liable to pay your solicitor in the event the case is successful.
At the outset of a case you should receive a detailed explanation of how this system works. Professional rules demand information be given in writing and, despite best efforts at clear-English, this is a subject which requires time and explanation. If a case is unsuccessful you will be responsible for your own solicitor’s costs, and the costs of the other side. It is important to consider the risks and receive advice as to how you can be protected from the risk. To understand the whole picture you have to understand how solicitors are paid, why one side in a case might have to pay the other side’s costs and how you can be protected. You may have legal expenses insurance, you may be a member of an association such as a trade union, or you may be advised to take out after the event insurance.
Court proceedings in personal injury cases usually means issuing a Claim Form in the County Court.
This is the formal start of case, when the timetable and control of the case passes into the hands of the Court. The case will have already been put to the defendant and their insurer. The Claim Form may contain the Particulars of Claim, or they may be in a separate document. The issue of the Claim Form by the Court is the start of Court proceedings. Either at the same time, or shortly afterwards, the Claimant must lodge a medical expert report as to the injury and a Schedule of Special damage which sets out all financial losses.
You might issue Court proceedings to comply with a time limit, to force the Defendant and its insurers to move more quickly, or because agreement cannot be reached.
Once issued, the proceedings must be served on the Defendant within four months and, beyond that point, the Court Rules and directions dictate the timescale. The Court will set directions for the case, once a Defence is served and each side has told the Court how it intends to present its case through its Allocation Questionnaire. The Defence is due 14 days after service of the Particulars of Claim, or the Defendant may lodge an Acknowledgement of Service within 14 days and gain another 14 days to prepare and serve the Defence. Do not get too bogged down in these timescales, as they are often extended by consent of the parties.
As a general guide, within 3 months of serving your proceedings, you will have a Defence which should clearly explain the arguments against your case. You should also have a timetable which takes you through to trial date.
Some solicitors avoid the issue of proceedings to avoid timetables, but if you have a good case with good evidence available, you should not be shy of this step.
The next stage is disclosure of documents relevant to the case, both liability and compensation. You should expect to disclose anything in paper or electronic form about the accident and the allegations you make. On the injury front, it is usual to disclose your complete medical records, personnel, pay and Department for Work and Pensions records. You are saying that injury and loss has been caused, so the Defendant is entitled to see your history and test your case.
The defendant is the person or organisation against whom a compensation action is brought. The term defendant is used in the Court documents. The compensation action is brought by the claimant against the defendant.
Dispute resolution – Arbitration – Mediation
Terms used for the modern approach to the process of resolving, rather than fighting about, a legal issue. The language becomes much less aggressive. This approach can and does work and the Courts are penalising those who do not use this approach without good reason.
You can arbitrate (arbitrator decides the result), or you can mediate (mediator helps both parties reach a settlement).
The evidence of both parties has to be ready and both parties have to be willing. You cannot just say no, you have to have a good reason, or you might be penalised in costs. Dispute resolution is not necessarily separate from the traditional Court proceedings route. As a case develops and all issues are clear, the parties may stop to discuss and try to settle. Dispute resolution, in one or more of its forms, will then play its part.
It is more about openness and confidence in your case than a firm process and it is so often the way to bring about a good settlement in the shortest time.
Dispute resolution has developed gradually and it i snot unusual to see it becoming mandatory in many legal processes.
General damages are for injury, pain and suffering and loss of amenity. Loss of amenity means all the things you cannot do, or do as well.
Calculating general damages is based Judge decisionsin cases, or precedents as they ar ecalled. The process has been simplified by the widespread use of the guidelines published by the Judicial College. These guidelines have removed much of the research and argument necessary in the past.
We used to wade through cases and try to argue an injury was similar to a previously decided case. You can imagine Claimant representatives would argue an injury was more serious and the Defendant would do the reverse. The Judicial College has simplified the process and reduced the research to reading a few pages of their paperback book. The categories used by the Judicial Studies Board are often wide so reliance on decided cases becomes necessary.
If you refer to the Judicial College guidelines, do make sure you have the current edition. Although many people think their broken arm is the worst broken arm ever, the injury will fall into one of the categories identified by the Judicial College. Ask your solicitor to show you the guide, as no technical knowledge is necessary to use it.
Gratuitous care is the care and attention provided to an injured person by friends and relatives without direct payment. This is care and attention above and beyond what is usually provided, which can be valued and compensated. If that gratuitous care had not been provided, then paid-for care services would have been necessary.
Interim payment is a payment on account of compensation.
An interim payment can be requested or applied for if Court proceedings have been started. You cannot have an interim payment in all cases. The other side must have admitted liability, or you must convince the Court you are bound to succeed.
Usually, you can seek your expenses and losses to date, but not those aspects of expense or loss which are going to be the subject of serious argument. An interim payment might cover the cost of repairs to your vehicle, or extend to the cost of buying and adapting a house to take account of your disability and care needs.
The downside of an interim payment is that if you do not prove your case and get less than the interim payment, you have to pay back the difference.
Interim payments are a good way to seek reimbursement of expenses and losses already incurred and, if used positively, a payment can help with rehabilitation and getting on with life.
Legal expenses insurance
Legal expenses insurance is something many people already have. This insurance is usually bought as part of another insurance policy, usually on a vehicle or home, so most people do not know they have such insurance.
It is difficult to buy legal expenses insurance as a stand-alone product. The insurers believe that those who buy such insurance are the most likely to use it.
You apply to the legal expenses insurer for assistance. If your case has a reasonable chance of success, the insurer should agree to support the case. Many insurers insist you use their nominated solicitor, but stick to your guns and use the solicitor you have chosen. The insurance will pick up the legal costs if your action fails. The level of protection depends on the specific terms of the policy, so detailed advice is necessary from an experienced solicitor.
The policy will have an indemnity level, that is the total sum it will pay out. The insurer must be satisfied at all times that the action has a reasonable chance of success, so your solicitor will have to inform the insurer if those chances change. So you will not have a free hand to proceed, as the insurer must agree to proceed with you.
Mitigation is your duty as a claimant to keep your loss to a sensible minimum.
When you claim compensation after an accident, you have a duty to mitigate, or reduce, your losses. Your response to the problems created by the accident must be reasonable. This applies to your ability to work, repairing a damaged item reasonably quickly to avoid a reduction in its value.
An example will help. You are involved in a car accident and your car is badly damaged and cannot be driven. What do you do, as you need to get to work? Have you alternative transport is the first question. Hiring an expensive car is not a reasonable approach when you have an alternative vehicle available. If the car repairer has a courtesy vehicle available when yours is in the shop, using that vehicle keeps your losses down and is a good example of mitigation.
A more complicated example is a self-employed lorry driver. If the injury means he cannot drive, it could make sense to hire a driver to cover rather than give up the work and contracts committed to.
To mitigate your loss you should take sensible steps to keep the loss down. The law will not support you if you let losses run away with themselves, expecting compensation to come to the rescue.
Part 36 offer
A part 36 offer to settle is an offer to settle all or part of a case with consequences if the offer is refused and not bettered.
The process of claiming compensation is managed by the Civil Procedure Rules. There Rules are divided into Parts, hence the term, Part 36.
Either party can make a Part 36 offer. but the consequences are tougher on a Claimant than Defendant. Part 36 was introduced to encourage settlement of cases, or parts of cases. You can at any time make an offer to settle any aspect of a case. Usually, an offer will be for a split on liability or the level of compensation. So where you accept 30 per cent of the blame, you offer 70:30 in your favour. If the offer is accepted you are left with only the compensation to argue about, and you have reduced the overall costs risk of the case.
A Part 36 issue can be used as a way of settling parts of a case, leaving only issues before the Court which need a decision. A Part 36 offer may be accepted within 21 days, or later with the agreement of party which made the offer, or by Order of a Court. If the offer is turned down and not bettered, the consequences are:
1. The Claimant who does not better the offer pays costs from the date of the offer up to the completion of the case.
2. If a Defendant does not better the offer, the Defendant pays extra interest on compensation and pays costs at a higher than usual level.
Although the consequences of not bettering a Part 36 offer are greater for a Claimant, do not be put off making an offer. To make an effective offer you must carefully analyze your own evidence, the other side’s evidence and look at the offer with their eyes. If you take the approach I must have every last penny of this case, your offer will not be accepted. Unless your case is 100 per cent on every single aspect, you will have to compromise. The benefit of the correct approach is ending all or part of the argument and reducing the risk of paying all or part of the costs. Be realistic.
Provisional damages are the exception to the rule that compensation is paid on a once and for all basis.
Provisional damages were introduced to deal with injuries with a potentially serious risk. Epilepsy is a good example. Even with mild head injuries, there may be a risk of the onset of epilepsy in the future. If the case is concluded with no sign of epilepsy, very little compensation is paid for that risk. The law is not generous where there are risks rather than actual injuries. In some cases epilepsy arose and the consequences were very serious. The inability to drive or do their job might be the outcome. That outcome would have received a tiny financial payment in the earlier example and nothing could then be done. Provisional damages are the answer in such a case.
Where there is a risk of serious deterioration in the medical position provisional damages can be sought. The possible future consequences are identified and if they come to light, that part of the case can be reopened. It is the right course where serious future deterioration is a risk.
Recoupment is the process by which the Government reclaims benefits paid to you and NHS costs for treatment provided to you, after an accident.
In simple terms, if you have received benefits you must give credit for them against certain aspects of your financial loss claim. Think of benefits received as a payment on account of compensation.
In addition to paying you compensation, the insurance company for the other side must then repay all benefits paid as a result of the accident back to the Government. The liability to repay the benefits and NHS costs rests with the defendant.
You may see the terms, compensation recoupment or CRU. The system is managed by the Compensation Recovery Unit of the Department for Work and Pensions.
If you would like greater detail, you will find it here.
Special damage or special damages
Special damages are the financial losses and expenses caused by injury. These losses run from the date of the accident and projected forward if the injury is very serious.
It is a glorified expenses claim. For damaged items you usually recover the value at the time of the accident, rather than replacement cost. Reasonable medical expenses can be recovered. You can claim earnings net earnings loss, so after deduction of tax and National insurance. Other usual expenses may be travel for medical treatment, prescriptions and medication.
Future loss of earnings are based on your medical evidence and are projected forwards. If the loss is for an identifiable term, or permanent, we rely on what are called the Ogden Tables. These are Government Actuarial tables which help us understand the capital sum necessary to produce an income. If a 40 year old man cannot work again and would have retired at 65 years of age, does he get his net annual wages x 25 years? The answer is no, because that would put the claimant in a financial position in which he would not have found himself without the injury. The Claimant would not ever have had 25 years earnings in his hands at one time. The law applies a multiplier to the annual net loss to produce a sum which, with a sensible investment strategy, should produce that annual net income and leave nothing in the bank by age 65 years.
You can claim for loss of pension, which involves algebraic formula.
Special damages calculations can be complicated but must be based on a detailed understanding of a client’s position and circumstances. It is here that much time and effort is dedicated to a case, so nothing is missed.