4. Complex Cases
4.1 Interim Payments
When a compensator makes an interim compensation payment, he will be liable to repay to the DWP all recoverable benefits paid during the relevant period and all lump sum payments paid up to the date of the interim payment. If the compensator makes any further payments, or an agreement that a previous payment was in final settlement of the claim, he will be liable to repay any further benefits and or lump sums paid.
However, before making any further payment, or reaching an agreement that a previous payment was in final settlement of the claim, the compensator:
- should apply for a fresh Certificate. This Certificate will show details of all recoverable benefits and or lump sums and the balance to be paid by the compensator.
In cases where there are recoverable benefits and a further compensation payment is made, the compensator:
- may aggregate the payments already made with the payments about to be made to CRU and the injured person; and
- use these aggregate amounts when calculating the reductions that may be made under Section 8 of the 1997 Act, see also Regulation 9 of the Social Security (Recovery of Benefits) Regulations 1997.
In cases where there are recoverable lump sums and a further compensation payment is made, the compensator:
- may aggregate the payments already made with the payments about to be made to CRU and to P, and
- use these aggregate amounts when calculating the reductions that may be made under Regulations 10 and 14 of the Social Security (Recovery of Benefits) (Lump Sum Payments) Regulations 2008 .
4.2 Multiple compensators
Normally when there is more than one compensator involved in a claim for compensation they will act together so that only one compensation payment is made to the injured person and the DWP.
However, where this does not happen compensators will be liable to repay any benefits and or lump sums , which have not already been repaid.
Each compensator may make only those reductions to the injured person's compensation allowed by Section 8 of the 1997 Act and Regulations 10 and 11 of the Social Security (Recovery of Benefits) (Lump Sum Payments) Regulations 2008 in relation to the compensation he is paying to the injured person and the benefits and or lump sum he is repaying to DWP.
The Health and Social Care (Community Health and Standards) Act 2003, gives provision for apportionment of liability to pay NHS charges where more than one compensator is involved.
If evidence is provided to enable the CRU to determine the liability, of each compensator, we can apportion the amount of relevant NHS charges that would be payable if there were only one compensator.
NOTE
Apportionment cannot be applied to the Social Security (Recovery of Benefits) Act 1997.
4.3 Structured Settlements
When a compensator, in final settlement of a claim, enters into an agreement for the making of periodical compensation payments (whether of an income or capital nature) or for the making of such payments and lump sum payments and those payments would fall to be treated as compensation payments:
- The date of the agreement will be classed as the day of a single compensation payment and liability will end at that time, if it has not done so already.
- Any further payments made otherwise than under the agreement will be disregarded for the purpose of determining the end of the relevant period in relation to that further payment.
4.4 Payments into court (England, Wales and Northern Ireland)
Where compensation is paid into court the compensator remains liable to repay any recoverable benefits and or lump sums due, to the DWP.
The compensator must obtain a Certificate and lodge it with the payment into court. The payment into court should be net of any recoverable benefits and or lump sums and net of any allowable deductions specified in Schedule 2 of the 1997 Act (see Section 1.2, Listed benefits covered by the scheme, and Section 1.3, Lump Sum Payments covered by the scheme).
The relevant period for recovery of benefits ends on:
- the day the payment into court is made - but only where the payment in is accepted within 21 days after the injured person is notified that the payment in has been made; or
- if accepted outside of the 21 days, the date on which application to the court for payment out is made.
- in cases where the payment is made in accordance with an order of the court, the date of that order
The compensator becomes liable to pay the full amount of recoverable benefits and or lump sums to the DWP once he is notified that the payment into court, or any part of it, has been paid out to the other party.
Please note: Section 16 of the Social Security (Recovery of Benefits) Act 1997 and Regulation 8 of the Social Security (Recovery of Benefits) Regulations 1997 refer to Payments into court.
Please note
A Part 36 Offer without a payment into court does not end the relevant recovery period. (See section 3 of the 1997 Act regarding the end of the relevant period)
4.5 Insurer's liability
Further information about cases where the amount of benefits to be repaid and the amount of the compensation exceed the insurers maximum liability may be obtained from CRU.
4.6 Clinical negligence
Claims involving clinical negligence may be particularly difficult. We therefore have a small team of specialists who deal with these cases. This is because they need to decide how much of the benefit was paid as a result of the negligence.
It is important that form CRU1 is submitted in clinical negligence claims as soon as you have been notified of the claim. This will enable us to provide a prompt and accurate service.
Please contact our Clinical Negligence Team if you have any queries about this complex area of work.
4.7 Goodwill payments
A goodwill payment, usually in the form of gift vouchers or the like, is sometimes made in response to a complaint about a product or incident; for example, if someone slips in a retailers premises and suffers only minor injury, inconvenience or embarrassment or if the consumption of foodstuffs is alleged to have caused a stomach complaint.
If such a payment is made at the time of the complaint or incident, CRU does not need to know about it.
However, if such a payment is made at a later date, benefits may have been claimed in the meantime. In these cases, a form CRU1 must be submitted, especially if there is a claim in respect of loss of earnings, cost of care or loss of mobility.
For NHS charges, where incidents or injuries were caused on or after 29 January 2007, in accordance with The Health and Social Care (Community Health and Standards) Act 2003, the term "compensation payment" includes not just payments of money but payment in money's worth, which might include, for example, provision of free rehabilitation services. It does not , however, capture ex gratia payments where there can be no legal liability to make payment.
4.8 Professional negligence
Where a claim is made for professional negligence and the particulars of claim, statement of claim or letter before action includes a claim for compensation as a result of the original accident, injury or disease, form CRU1 must be submitted and any listed benefits and or lump sum paid in consequence of the original accident, injury or disease will be recoverable.
4.9 Property damage only claims
You must notify CRU on form CRU1 if a claim for property damage includes a claim for loss of earnings, loss of mobility, cost of care or any other element of compensation.