ANNEX E KEY DIFFERENCES TO THE ROAD TRAFFIC SCHEME

The scheme is not restricted to motor claims

1. The key change is that the scheme is not restricted to personal injury claims following road traffic accidents but will apply to all payments of personal injury compensation. The 1999 Act will however still be in force up until 31 March 2005, therefore any claims relating to motor accidents up until and including that date will still be captured by the 1999 Act with associated NHS charges being recoverable. The new Act will relate to all personal injury claims occurring on or after 1 April 2005. Throughout the 2003 Act and the draft Regulations, any references relating to road traffic accidents have been changed, for example

“traffic casualty” is referred to as “injured person”.

The scheme is not restricted to injuries occurring in the UK

2. The definition of the word “road” in the 1999 Act had the effect of restricting the NHS costs recovery scheme to those injured in road traffic accidents occurring in Scotland, England, or Wales. The 2003 Act contains no such restrictions. An injury occurring abroad for which the injured person receives compensation will attract NHS costs recovery if the injured person receives treatment for their injury in Scotland, England, or Wales. So, for example, if someone is injured while on holiday in Spain and after being stabilised is flown home to Scotland and spends three weeks in a Scottish hospital, costs for that three week stay will be recoverable if the injured person makes a successful compensation claim against the person responsible for causing the injury.

Recovery of NHS ambulance service costs

3. The expanded scheme includes the recovery of NHS ambulance service costs for each case where the injured person is transported to or between hospitals for treatment of the injury for which compensation is paid.

4. The 2003 Act requires the Secretary of State for Health (in practice the CRU) to designate each ambulance trust in England and Wales to a particular NHS trust or Primary Care Trust (PCT). Each ambulance trust will receive payments for any NHS ambulance transportation made to its main feeder NHS trust PCT regardless of whether or not that ambulance trust provided the transportation. This system was adopted to allow the administration of the scheme to be kept simple and to minimise administration costs.

Ambulance trusts will, in the main, receive payments for journeys they have undertaken and any gains or losses should balance out over time for most trusts.

5. Likewise, the Scottish Ambulance Service will receive costs for any ambulance transportation made within Scotland but where the Scottish Ambulance Service provides transportation to a trust in England or Wales, that trust’s designated ambulance trust will receive the payment for the transportation. However, the Scottish Ambulance Service will receive payment for any ambulance transportation to a Scottish hospital made by an English or Welsh ambulance trust

Contributory negligence

6. Another new power within the 2003 Act allows for contributory negligence to be taken into account, in certain circumstances, when considering the degree of liability. A reduction in the compensation awarded is allowed in cases where there has been an element of contributory negligence and where a court has ordered such a reduction, where a court-endorsed agreement has been reached, or where a finding has been made through a recognised mediation process. Liability for NHS costs recovery will be reduced by the same proportion as the overall reduction made for the finding of contributory negligence. So, for example, if there is a finding of 50% contributory negligence against the injured person (ie the injured person has been found to be 50% liable for his injury) then the NHS costs will be reduced by 50%.

7. The onus will be on compensators to provide adequate evidence of a contributory negligence finding of a qualifying type. A letter from a solicitor will not be sufficient.

Hardship waiver

8. The 2003 Act also introduces a new right to apply for a waiver of the requirement that compensators must pay any NHS charges deemed due before they can appeal against the level of those charges. The reason for the requirement that charges be paid up front was to minimise spurious appeals intended only to delay payment of charges due. As the current road traffic scheme only takes into account payments made by insurers, there was never likely to be a case where paying NHS charges might cause severe financial hardship to the compensator. Under the new scheme, however, NHS charges could be deemed payable by small businesses or individuals for whom large payments of NHS charges on top of the compensation payment itself could cause exceptional financial hardship. Given that inability to pay the charges would, in effect, deny such compensators the right of appeal against them, Ministers agreed that the power to waive payment prior to appeal in exceptional cases should be included in the Act.

9. Compensators will also have the right of appeal against a decision not to grant a waiver and the Appeals Service (tAS) will be able to hear such appeals, as will the Social Security Commissioner on a point of law. It is envisaged, however, that the waiver will only be granted in truly exceptional cases, such as where the raising of money might, for example, put an individual’s home at risk or bankrupt a small business.

Liability of Insurers

10. Another addition to the scheme can be found in Section 164 of the 2003 Act. This ensures that where a person’s liability to pay compensation is covered to any extent by an insurance policy, their liability to pay NHS costs is also covered. It is also made clear that insurance policies may not restrict or exclude the level of NHS costs covered. This means, for example, that insurers carrying corporate insurance policies with high excesses will no longer be able to claim that there is no liability to pay NHS costs because a compensation payment has not exceeded the excess.

11. Regulations can also be made limiting the liability for NHS costs in certain prescribed circumstances as it is recognised that there may be some cases (other than where an excess is in place) where an insurance policy may not cover the full extent of the compensation liability, so that it would be unfair to require that it should cover the full extent of the NHS

costs liability. For example if compensation of £100,000 is awarded, but the relevant insurance policy has an upper limit of £80,000 per claim, the insurer will only be liable for 80% of the compensation payment. The insured person will be personally liable for the remaining 20% and so this would be taken into account in relation to NHS costs recovery. In this example, the insurer would only be liable for 80% of the NHS costs, with the insured person liable for the remainder. Obviously, if the compensation payment does not exceed the upper limit of the insurance policy, then the insurer will be liable for the full amount of NHS costs.

Claims under the Fatal Accidents Act 1976

12. Consultees’ attention is also drawn to another change introduced by the 2003 Act, which is that claims under the Fatal Accidents Act 1976 that may have attracted NHS charges will no longer be recoverable. This exemption can be found under Schedule 10 of the Act.

ANNEX F