Frequently Asked Questions

How do I value a claim? You've had an accident and brought a claim. Your solicitor (one of the BMF Biker Legal Line solicitors of course) has managed to extract an admission of liability in full or in part from the defendant’s insurers and you are now looking to value your claim.  But how do you do that? Ward Gethin Solicitors’ Neil John offers some useful advice: The English legal system in this regard is a compensatory  ystem and not a punitive one. This means that the  defendants are obliged to compensate you for your losses and injuries only – the courts have no power to punish the defendants for their negligence. Damages will not be awarded for an act of negligence alone, however blatant that negligent act is. Only the actual losses (including injuries themselves) will be compensated. So how are successful claimants compensated? There are two types of damages – general damages and special damages. General damages relate to the injuries and specials to expenses. Dealing with the last one first, the notion behind special damages is that the successful claimant is put back in the financial position he or she would have been in had the accident not occurred. For example, if a claimant was earning say, £250 per week after deductions before the accident and earned £100 per week for two weeks off work after the accident, his/her net loss would be ([£250 x 2] – [£100 x 2])=£300. A court would not award any more than this, as a claimant is not allowed to make a profit from these damages. Special damages encompass expenses such as loss of earnings, loss of riding equipment, policy excess, prescription charges or medical supplies and travel expenses to medical appointments. In certain circumstances, care costs may also be recoverable if the injury suffered means the claimant is unable to look after themselves as they normally would had they not been injured. This may include food preparation, personal care and mobility assistance, and is usually only recoverable in the more serious cases. One concept which is often raised by defendant insurers in the context of leathers and other personal possessions is Betterment. If a garment, such as a set of leathers, has a normal working life of, say, five years and is damaged beyond repair after two years, the defendants may argue that they are only obliged to pay for the unexpired life of the garment. For example, if a £500 set of leathers, which normally last five years, are destroyed at two years old, the insurers will probably contend they are only required to pay for three years’ worth (£300). In cases where a claimant is seriously injured and is unable to return to his/her previous job, or requires ongoing treatment or expenses, a future loss claim can be made. Past losses, such as loss of earnings immediately after the accident, can be claimed in full, but future losses, for example partial future loss of earnings to normal retirement age, must be discounted. The reason for this is that if a sum is claimed for a future period of loss, then when that period ends, the pot of money should be empty, as the annual loss is deducted every year. If a claimant earned, say, £300 per week after deductions prior to an accident, but had to change jobs due to his injuries and could only earn £200 per week after an accident, he would be losing £100 per week (or £5,200 per annum). If that claimant was 25 years old at the time of trial, and would have worked to 65 years of age, the simple calculation is £5,200 per annum x 40 years = £208,000. The court would not allow this as if the future loss claim were invested, it would earn interest, and on the claimant’s 65th birthday there would be some money left in the pot even if £5,200 were removed every year. The exact calculation is based on a set of actuarial tables called the Ogden Tables (not after Stan and Hilda) and the current calculations take account of a 2.5 per cent return on the money to be invested. The tables are subject to variation for reasons such as economic growth in the claimant’s area, and the particular risks of his job (a person performing a high risk job is less likely to reach his 65th birthday than someone doing a lower risk job). The basic number of years by which the annual loss is to be multiplied on the above claimant with 40 years left to work is 25.05 (2005 Tables). The award for this would therefore be £130,260, which could of course be invested to produce a return. If a claimant is, despite their injury/disability, able to return to their preaccident employment and do not lose ongoing wages, there may still be a claim for disadvantage in the labour market. The theory behind this head of claim is that while the claimant has returned to work, if they were subsequently out of work for any reason, they would find it harder to secure new employment as they would be competing with others who did not have a significant injury in their past history. Clearly this will not apply in all cases, as many claimants make a full recovery. To succeed in this type of claim, the injury must be directly relevant to the work undertaken, for example a claimant with a back injury would find it difficult to secure fresh employment in manual work. Awards for disadvantage in the labour market tend to be in round figures and vary from case to case. If an award is made it is somewhat speculative and is not usually less than £2,000. So what price do the courts place on pain? The textbook definition for General Damages is pain, suffering and loss of amenity. Pain and suffering can be described as immediate and subsequent symptoms, while loss of amenity is more wide ranging and covers not only the inconvenience of the injury but also any long-term symptoms. It is impossible to subjectively put a price on pain, as every claimant is different as is every injury. The only way to value an injury claim is with a medical report from a specialist in the relevant field. The report will identify the injury sustained, the treatment received and the likely recovery time – only symptoms which the expert attributes to the injury are the responsibility of the defendant – and if an incomplete recovery is made what symptoms the claimant is likely to have in the long term. Once this prognosis is known a valuation can be made. The first reference point is a booklet called The Judicial Studies Board Guidelines for the Assessment of General Damages, or simply the JSB as it is colloquially known. The JSB, currently in its 7th edition, contains broad financial brackets for each type of injury. As the name suggests, these are only guidelines, but a copy is supplied to every Judge in England and Wales who decides personal injury cases. Once an appropriate bracket has been selected, the second place to look is case law. This gives the claimant’s solicitor an opportunity to trawl through cases previously decided by the courts in terms of the value they place on injuries similar to those of the claimant. If the case found is a few years old the award made can be updated by reference to the Retail Price Index. The idea is to find a case as similar to the claimant’s in severity of injury, treatment received and, most importantly, prognosis. In crude terms the longer symptoms last, the more a claim is worth. For example, a whiplash injury, with moderate symptoms lasting two years is valued at around £4,250, while a broken finger or rib which is very painful for four to six weeks and is then fully resolved, would be valued at £1,500 to £2,000. To give some scale to these figures, the highest bracket in the current JSB guidelines is for quadriplegia and the level of the award is described as being affected by the extent of any residual movements, the presence and extent of pain, depression and age and life expectancy. The financial bracket for an injury of this severity is £175,000 to £220,000. Doesn’t sound a lot, does it? What should be borne in mind though, is that where general damages are awarded in these sums, the total claim is likely to be several million pounds once care costs and other medical requirements are factored in. Another point to consider is that pain is not restricted to physical pain. It is established law that claimants can recover considerable sums of money (up to around £60,000) if they can establish, with a medical report, either Post Traumatic Stress Disorder or some other recognised Psychiatric Disorder has arisen from the accident which is the subject of the claim. Smaller sums are recovered if lesser conditions such as travel or situational anxiety have been caused by the accident. Any diagnosis of a psychiatric condition will be subject to the strict clinical tests, which the expert undertakes at examination, and to recover damages, for example, for PTSD, a claimant must satisfy the clinical criteria for this condition. One point which often goes unexplained is where there are two distinct injuries, such as a broken wrist and a neck injury, arising out of the same accident. The claimant will not receive the full value of each injury if it were valued in isolation. A broken wrist, depending upon severity, might be valued at £4,000 and a soft tissue neck injury lasting nine months may attract an award of £1,800 on its own. The two injuries together would not mean a total award of £5,800. The court would consider the overall effect on the claimant’s life and the inevitable overlap of pain and inconvenience between the injuries. I suspect a court would award somewhere in the region of £4,750 to £5,000. So what is the basic premise of damages for personal injury? A good way to think of it is that the special damages put the claimant back into the financial position he would have been in had the accident not occurred and the general damages provide a token award for the pain and inconvenience of being injured. Ward Gethin’s Neil John explains more: The MIB enters agreements with the Government from time to time, which set out how the two schemes operate. The current agreement for uninsured and untraced drivers are 13 August 1999 and 14 February 2003 respectively, and any accidents after the date of an agreement are usually bound by that agreement. In both cases, there are earlier agreements and any accident before the above dates will be covered by the preceding agreement. As stated there are two spheres of the MIB’s work: uninsured and untraced drivers. If a vehicle is insured, whether the driver is or not, any claim arising out of the use of that vehicle will be dealt with by the relevant insurer, under the provisions of the Road Traffic Act 1988. Where neither the vehicle nor the driver is insured, subject to certain notification provisions, the MIB will indemnify a claimant for any damages due to him or her. In this circumstance, the MIB will require the claimant to sign over, or subrogate, his or her rights to pursue the uninsured driver to the MIB so it can attempt to recover any outlay if this is possible. This will depend a great deal on whether the uninsured driver has any assets – the answer is usually no. In a claim involving an uninsured driver, the successful claimant can recover damages in the same way as if the defendant were insured and is subject to the same time limits, requirements to issue court proceedings and to obtain judgment against the named driver. The obligations on the claimant’s solicitor are also higher than for untraced claims. The solicitor must make all reasonable enquiries to see whether the third party is insured and, if so, identify the insurer, as soon as reasonably practical. In essence, the enquiries should be made on the day of instruction. Historically, the preferred method of obtaining this information was to write to the third party driver on the day of receipt of instructions requesting their insurance details pursuant to Section 154 of the Road Traffic Act 1988 within three days. If no details are forthcoming within that time frame, the solicitor should then report the driver to the police for failing to provide the information, and notify the MIB of a potential claim. With the advent of improved technology, the Motor Insurers Database and Information Service has come into being. This website contains a search engine which solicitors who register have access to, allowing them to enter a registration and date of accident. The search will reveal whether insurance cover is registered against the vehicle on the relevant date and, upon request, an email will be sent to the solicitor confirming the insurer’s contact details and policy number. If no details are found, and not all policies are registered on the database yet, a prompt will arise to download the uninsured driver’s agreement application form and the MIB will be automatically notified of a potential claim. The requirements to register a claim for an untraced driver are less stringent – the application form must be lodged with the MIB within three years of the accident. As there is no named driver to sue, proceedings cannot be issued. The MIB then investigates the application and decides whether the accident was caused by the actions of another driver. If so, an award will be made. If not, there is a right of appeal to an arbitrator but if the appeal is unsuccessful, the claimant is liable to pay the arbitrator’s fee, currently just under £600. Under the untraced driver’s agreement, only injury damage is recoverable and a contribution towards costs. Expenses such as motorcycle repairs and damaged clothing are not generally payable under the untraced agreement, unlike the uninsured agreement. Where property damage is recovered, there is an excess currently £300. The most common examples of untraced drivers are hit and run accident and fuel or other spillages. It is important, if you are able, to gather as much evidence (including photographs) of any spillage at the time and report it to the police as soon as possible to enable a report to be compiled as this may help the MIB to establish that a hazard existed at the time of your accident. This is the last thing on anyone’s mind when the worst happens, but remembering a registration plate if another vehicle hits you may mean you can claim full compensation rather than reduced damages if you have to proceed under the untraced drivers agreement. The 6 golden rules after any accident are: 1. Get every party’s name, address and registration number. 2. Gather as much physical evidence as you can – such as photos of the road surface or the other vehicle. 3. Take the name and address of any witness. 4. If you are injured in any way, call the police out to the scene. 5. If the other driver leaves the scene without giving you his/her name and address, report it to the police straight away. 6. Ring Neil on 01553 660033 and talk to a specialist biking solicitor. This is not designed to be a definitive guide to MIB claims or how to make them. For a friendly efficient service, follow rule 6 above.           Go back to Frequently Asked Questions