Keoghs Insight


Win or Lose at Stage 3


Evidence shows that defendants are more likely to lose a Stage 3 hearing than win (although that can still work out cheaper than accepting the claimant’s offer). The average Stage 3 hearing takes no more than 15 minutes; this is ‘rough justice’ and not the arena for complex arguments.

So how does a defendant maximise their chance of winning at a Stage 3 hearing or, perhaps more realistically - how do they avoid incurring the Part 36 penalties of a claimant matching or beating their protocol offer?  In short, by putting forward clearly reasoned arguments at Stage 2 along with any supporting documents – remember no new evidence or arguments can be raised after the end of Stage 2 (Rules 7.41 and 7.57 of the Pre-Action Protocol and Practice Direction 8B 7.1).

As a rule of thumb the Settlement Pack Response should be completed with the mind-set that the claim will proceed to a Stage 3 paper hearing and you are explaining these things to the judge.

Defendant general damages offers are often at the lower end of, or even below, JC Guidelines. More claims tend to settle than not so the increased costs payable in cases which do go to Stage 3 are more than compensated for by the aggregate ‘saving’ on damages agreements made in the majority of cases. This means that the arguments put forward need to provide the Judge with a justification for the lower figure.

Insurers should also consider the timing of the report – is the prognosis overly pessimistic given the short time since the accident, or are the injuries now resolved and the expert is relying on the claimant’s self-reported injuries?

We would also recommend commenting on the severity of initial symptoms, medical treatment needed, when the symptoms started to improve and by how much. Were any restrictions at home or work significant? It’s important to be clear which bracket of the JC Guidelines you are placing the injury into. 

We would also give a word of warning. Making an offer which is clearly below what one would expect based on the medical evidence, for example on the grounds that ,  it was a low velocity impact or the claimant was exaggerating/had a pre-existing condition, means the case then takes on causation. The Court cannot determine such issues without more evidence than is typically available at a Stage 3 hearing and without supporting evidence the argument will fail.

Which brings us onto physiotherapy fees. Review the medical report to check that physiotherapy was recommended (including the fees sought, e.g. triage fee, initial assessment, physiotherapy sessions and discharge reports). Judges will not award for both triage fee and an assessment fee and they tend to take a consistent approach with regards to rates with between £50 and £55 considered the norm. It is helpful to provide evidence in this regard. Without admissible evidence in the form of comparatives or a Copley v Lawn compliant letter it is highly unlikely that any Court will find a failure to mitigate.

The point should also be made that discharge reports are unnecessary and are, apart from in exceptional circumstances, an irrecoverable expense.

Pro-forma invoices are not evidence that the physiotherapy has taken place so make that argument – but don’t simply state that you won’t pay on the basis of a pro-forma invoice. Telephone physiotherapy will be allowed but argue for a reduced rate.   

Now for car hire. A nil offer can be valid but, as with any offer, the defendant needs to put forward an explanation. A comment along the lines of ‘we have instructed [insert supplier name] to deal with this’ or requests for further information/documentation are not sufficient. In the absence of an explanation from the defendant in the relevant comment box at Stage 2 the claimant is guaranteed success at Stage 3.

In the words of DJ W Owen “I note the CPP states ‘Please provide clearer copies of driving licence ….. and explain recovery’ these matters are not particularly relevant and do not prevent the defendant from providing proper responses which would allow counsel for the defendant to challenge the claim. ……I am unable to reduce the [the hire claim]. If the defendant insurers will produce ammunition I will more than willingly have regard to it …..”

Need, impecuniosity and period should be challenged. If you are going to challenge rate then you must provide alternative basic hire rate evidence and ensure this is uploaded to the portal. 

Phillips v Willis restricts the defendant’s ability to transfer to Part 7 at Stage 3, which would require an application in any event, so if faced with a large credit hire claim at Stage 2 consider at that point whether there is a benefit to exiting the claim from the portal. 

Miscellaneous Expenses

Some judges will award most of the amount claimed, some have a set sum they always award and some award nothing. But more often than not something will be awarded. It is possible to argue for less in respect of any particular head of loss, or indeed all of them, but offer more than the sum of the individual offers in the ‘offer’ box. The protocol itself envisages that – see paragraph 7.41. Tactically it might be sensible to offer £0 for miscellaneous expenses and argue in the comments box that ‘We offer nothing for speculative, undocumented expenses’ but allow that £10-£20 in the overall offer. 

Here are a few simple points which can make a real difference to the outcome at Stage 3:

  • A defendant’s Part 36 Section II offer (‘Protocol offer’) is the total amount of all sums offered in the Settlement Pack Response – it is that figure which is entered in ‘Part B’ of the CPP. So if a head of loss has been paid, say so in the comments box but insert the actual amount paid in the correct box for that head of loss otherwise your protocol offer will appear to be lower than it actually is.
  • There is no obligation on the claimant to negotiate. Once you have responded to the Settlement Pack the claimant may sit tight until the end of the negotiation period and then issue Part 8 proceedings without sanction. We are not suggesting that you always make your first offer your best offer but know your opponent and implement specific protocols for specific claimant firms.

In comments on the Stage 2 settlement pack don’t simply refer to ‘attached documents’ but provide sufficient description for them to be clearly identified e.g. ‘offer of rehabilitation dated [date]’. 

Which brings us finally to the CPP.  On a regular basis we see issues with the CPP such as:

  • The claimant has tried to include something (document, comment or even a head of loss!) not previously sent to the defendant at or before Stage 2
  • The claimant has omitted defendant’s comments/documents
  • The parties’ offers have been added up incorrectly for the purposes of completing Part B of the Pack
  • The figures included in Part A are the initial and not the final offers 

Whether deliberate or not, they are all prejudicial to the defendant’s case at Stage 3. It is vital that the CPP is checked for accuracy and completeness and, if any inconsistencies are identified they must be raised with the claimant within five working days or the Court will assume that the contents are agreed.