When someone suffers an accident, it can turn their life upside down. Apart from coping with pain and disability they can face serious financial and practical difficulties if they cannot work and have no regular source of income.
Accident victims need swift resolution of compensation claims to alleviate financial difficulties and minimise distress. There have been significant recent improvements under the Scottish legal system with the introduction of protocols to lay down time limits for how claims should be handled. The courts have also been proactive in trying to have claims for compensation resolved quickly. But with the best will in the world, claims can still take many months, sometimes longer to conclude.
However, a major change in April could make a difference to the early resolution of claims. Pursuers’ offers mark a shift in the balance of power between the person bringing the claim (pursuer) and person/organisation facing the claim (defender).
Previously, only defenders could make a formal offer to settle a claim with potential cost implications for the pursuer if the offer was not accepted. This often put immense pressure on pursuers, already in a vulnerable position, to settle a claim for less than it might be worth to avoid the possibility of having to pay the defender their court costs for the time after the defender’s offer was received. Pursuers might choose to resolve matters sooner than was in their best interests, to get back on a financial even keel.
Until now, the pursuer has not been able to make a corresponding offer to settle, but from 3 April, the option of a pursuer’s offer becomes available, allowing the accident victim to say to the defender they are willing to settle their claim for a specific sum. If the defender doesn’t accept the offer, or delays, they face a penalty equal to an additional 50 per cent of court costs.
Defenders can be slow in applying their minds to the potential value of a claim, by focusing on liability issues. If a pursuer has a well-prepared case, and is clear on the likely value of the claim, the use of a pursuer’s offer could be extremely helpful in achieving early resolution. I expect to see a significant number of claims being resolved earlier than would otherwise have been the case, which can only be good for accident victims.
Most types of court action are suitable for pursuer’s offers but not all; they can only be made where there is a financial claim such as compensation in a personal injury cases or breach of contract.
Cases with a future loss element – where an injury is more serious and could potential have life-long consequences – will be more complex, especially as the mechanism for calculating future losses has changed in England and Wales recently and is likely to change in Scotland soon.
I’m already looking at specific multi-million cases to advise clients on whether they should be making an offer to settle. All solicitors must talk things through carefully with clients, informing them of their rights to make offers and giving sufficient information about whether it is appropriate in their case and if so, what level of offer should be made.
I sincerely hope this new, more flexible, approach will help those who feel the system lets them down. Lengthy and expensive litigation is rarely in the client’s best interests. Early resolution of claims can remove anxiety and avoid clients having to borrow money to minimise financial hardship while they await the outcome of their case.
Iain Nicol is a Litigation Partner at Balfour+Manson LLP