New Ministry of Justice Rules Effective 31st July 2013

The Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO) started to impact on the settlement of liability claims earlier this year. However, perhaps the most important change occurred on 31st July when the claims notification portal was extended to include other types of claim.

We first published an article about this subject in May 2013, which can be accessed by clicking here. This provides you with some background to the changes.

What is of extreme importance from 31st July 2013 is that clients (or their agents) only have 24 hours to acknowledge receipt of a liability claim made against them. It is therefore vitally important that anyone who may receive a claim of this nature is aware of the restriction and makes their Broker or Insurer aware of the claim notification immediately.

The electronic portal has already been set up, and covered all claims following motor accidents where the personal injury element of the claim was under £10,000. These claims had to be submitted electronically via the portal. From 31st July 2013, this portal has been extended to include both Employers and Public Liability claims, with the claim limit across all classes of business being raised to £25,000.

As Motor and Employers Liability are both statutory classes of insurance, the claims should (in theory) be notified directly to the insurance companies using central databases, which show the insurance company for most Employers Liability and Motor insurance policies. However it is Public Liability claims where we believe the main issue of notification will arise as there is no central database for this class of business or indeed every property where claims may occur. The claim notifications are likely therefore to be sent directly to the defendants or their agents.

The reason for the extension of the portal is to “fast track” claims, but the main pitfall for clients of the reforms is the strict 24 hour timescale to acknowledge claims as detailed above. It is hoped that using the portal will massively reduce legal costs payable to claimants lawyers and it is therefore quite feasible that lawyers may try to manipulate a claim so that they fall outside the portal, hence greater legal fees being recoverable. A cynic may suggest that Public Liability claims could, for example, be misdirected to any address such as a Managing Agent; Site Address; Registered Office or Head Office of a property owner, in the expectation that the deadline for acknowledgement of the claim will be missed. This is something clients should be mindful of, as they will need to be in a position to respond to the prescribed Claims Notification Form (CNF), if received, within the 24 hour period.

As this is a new system, it is impossible to determine how courts will treat late notifications and indeed whether insurers will consider that they have been prejudiced for failure to comply with the terms of the Act resulting in an increased cost to them. It could conceivably mean that insurers look to avoid paying the increased legal fees or indeed look to avoid paying the claim in its entirety.

MOFS will provide further information when it is available as to how the portal appears to be working in practice. The most important feature is however that the CNF must be dealt with IMMEDIATELY and systems and processes operated by clients must be sufficiently robust to deal with this new notification issue. A sample of a CNF can be accessed by clicking here.

For further information please contact any of the Broking team or Claims team at MOFS, but the latest fact sheet from AXA Insurance and guidance can be obtained by clicking here.

For more information call 0151 255 2600 or email