Plexus Law were instructed by Direct Line Group to defend a matter following a road traffic accident which occurred in February 2017. In January 2020, the Claimant issued a claim, expecting to recover more than £25,000 but not more than £50,000 in damages. The Claimant reported injuries to his wrist (which had resolved in 4.5 weeks) and a knee injury, namely a meniscus tear which required him to undergo arthroscopic procedures. Ongoing knee symptomology was however reported.
In the Claimant’s provisional schedule of loss, loss of earnings was pleaded at £992.25 (arising from 7 days absence), and gratuitous care was pleaded in the sum of £360 (arising from 2 hours care per day for a period of 25 days).
The Claimant made no claim for past or future losses beyond the above.
Despite the pleaded loss, the Claimant’s initial raft of expert evidence suggested that the Claimant had not in fact returned to work following his arthroscopic procedure in March 2018 as he continued to experience symptoms. The Claimant’s orthopaedic expert recommended further arthroscopic surgery, however, he was of the view that the Claimant would be able to return to work 4-6 weeks thereafter. At this stage, the Claimant’s potential loss of earnings claim appeared to be significantly higher than initially pleaded.
Upon further arthroscopy surgery and following an MRI scan, it was noted by the Claimant’s expert that the pain and stiffness that the Claimant continued to complain of arose from his pre-existing arthritis which was unrelated to the accident. The Claimant’s expert opined that the ongoing absence from work was not accident related and concluded that the Claimant was not at any disadvantage on the open labour market.
With a final prognosis available, and a cut-off period for any attributable absence from work, Plexus were hopeful of an early settlement before exchange of expert evidence. However, there was the issue of recoverable benefits! The Claimant had been in receipt of Universal Credit since July 2017 and at the stage of possible settlement, attributable recoverable benefits were in excess of £80,000 and were continuing at £1,500 per month.
Upon review of the Claimant’s DWP records, it became apparent that the Claimant’s application for Universal Credit was unrelated to the index accident. In his initial application, the Claimant denied any disability, illness, or ongoing condition. He did however, advise that he is a carer for his partner and looks after that person for 35 hours per week or more. The Claimant’s partner also made a linked application, confirming the details as reported by the Claimant. As a result, the Claimant and his partner were awarded universal credit which continued to be paid.
The continuing payments of universal credit were not as a result of the index accident but as a result of the household situation, the Claimant’s partner’s inability to work, and the Claimant’s inability to work/impact on work as a result of unrelated symptoms. Evidence from within the Claimant’s DWP file also suggested that the DWP deemed him capable of work and he was expected to look for work as his benefit payments were dependant upon the same.
Whilst there were clear prospects of successfully appealing the attributable benefits, the Compensation Recovery Unit (‘CRU’) were experiencing significant delays in actioning any review requests (up to 12 months!) and any response was likely to be received towards the conclusion (or after) of this matter. There was of course also the risk that the CRU would review the matter and continue to attribute the benefits to the accident.
Despite the above, on the basis of the medical evidence available, Plexus recommended settlement of the claim at a low figure with no offset of benefits with the view of issuing a mandatory reconsideration request thereafter. This would allow settlement to be achieved in the early stages, keeping the Claimant’s costs to a minimum and bringing the continuing benefits to a halt.
Settlement was subsequently agreed and an extensive, detailed, mandatory reconsideration request was made together with all supporting evidence, signposting all inconsistencies in the Claimant’s account. Whilst this tactical decision carried substantial risk, it was worth it! The CRU has since reviewed the certificate and reduced any recoverable benefits to NIL.
Learning Outcome
This claim is merely one of many whereby the introduction of the ‘umbrella’ benefit, Universal Credit, is causing substantial benefits to be wrongly attributed to accidents. Universal Credit consists of unrecoverable benefits such as housing benefits, child and working tax credits therefore careful consideration ought to be given when attributing benefits to an accident. However, unfortunately, this does not always appear to be the case.
Defendants and insurers are therefore left with the question of whether they should continue to incur costs of litigation whilst awaiting reviews or take the risk of appeal following settlement. Clearly, as in this case, it is certainly worth progressing a full reduction of benefits, despite the risk, should the evidence support the same.
One important point to note is that seeking thorough disclosure of the Claimant’s DWP file is essential in establishing the true reason behind why benefits are received. Additional evidence may also be identified which can be cross-referenced with the Claimant’s reported account to medico-legal experts.
This claim represents a significant saving for the client and Plexus will continue to challenge all matters with issues of this nature.
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For further information on this case please contact:
Lorien Helm, Partner
T: 0161 245 7930 | M: 07584 147 890 | E: lorien.helm@plexuslaw.co.uk
Sarah Bytheway, Solicitor
T: 0161 244 6929 | E: sarah.bytheway@plexuslaw.co.uk
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