MPs Call For Inquiry Into Personal Injury Reforms
Forths • March 20, 2017
An inquiry into the personal injury reforms has been called for by MPs on the justice select committee.
The announcement was made on 17th March to confirm that the committee will be launching an inquiry into the controversial reforms under Part 5 of the Prison and Courts Bill, which relate to RTA whiplash claims and the plans to raise the small claims limit.
Personal Injury Reforms
Respondents have been invited to make written submissions of no more than 3,000 words by Friday 31st March.
The basis of submissions is to address five specific issues outlined in the official press release:
- The definition of whiplash and the prevalence of RTA-related whiplash claims.
- Whether or not fraudulent whiplash claims represent a significant problem and, if so, whether the proposed reforms would tackle this effectively.
- The provisions in Part 5 of the Bill introducing a tariff to regulate damages for RTA-related whiplash claims, with an uplift in exceptional circumstances; and banning the settlement of claims without medical evidence.
- The impact of raising the small claims limit to £5,000 for RTA-related whiplash claims, and of raising the small claims limit to £2,000 for personal injury claims more generally, taking account of the planned move towards online court procedures.
- The role of claims management companies in respect of these matters.
Recently the proposed personal injury reforms have been questioned by MPs with the justice select committee chairman suggesting the MoJ should be targeting claims management companies. Beyond this, a member of the transport select committee suggested that the reforms would put genuine Claimants at the ‘risk of injustice’ rather than reducing insurance fraud.
Forensic Accounting Services - 0113 387 5670
At Forths our team of forensic accountants assist solicitors in the complex loss of earnings, loss of pensionand loss of dependencyelements in a wide range of personal injury claims.
Our Expert and Agency forensic accounting services have been developed to provide robust, independent and accurate findings to assist in quantifying a Claimant’s financial loss.
For an initial no obligation chat about your case with our experience team of forensic accountants, call us on 0113 387 5670, email us at enquiries@forthsonline.co.uk or fill out an Enquiry Form and we’ll contact you directly.
Recent tax changes announced by Chancellor Jeremy Hunt may mean that any future loss calculations may require review. If you have an ongoing case that we have assisted with, we would be happy to discuss this with you. Likewise, for any potential new instructions we are always happy to have an initial chat. National Insurance Cuts On 6th January 2024 cuts to National Insurance rates will come into effect for employed Claimants: The main NI rate is being cut from 12% to 10%. From April 2024 for self employed Claimants: Class 4 NI rate will reduce from 9% to 8%, and; Class 2 NI contributions will be scrapped. The changes will affect future Loss of Earnings calculations. State Pension Changes There will also be a rise in State Pension of 8.5% from April 2024. Losses to State Pension are considered on a case by case basis. How We Can Assist Our experienced team assist with Loss of Earnings, Pension Loss and Loss of Dependency elements in all types of PI, Clinical Negligence and Fatal cases. Our approach is to ensure that your client’s Special Damages are optimised. We offer flexible solutions and reporting styles depending on the case requirements, and can assist you in the information discovery process. We are also happy to liaise directly with clients to assist in the progress of the case. For more information about our hourly rates for Expert CPR or White Label / Agency Services, and deferred payment terms, talk to our team. Contact us here Call us on 0113 387 5670 Email - enquiries@forthsonline.co.uk
In the 2023 budget, Chancellor Jeremy Hunt announced fundamental changes to the Annual Allowance and Life Time Allowance charges for pensions savers. What are The Allowances? The Annual Allowance is the amount that an individual can pay into their pension scheme (both their own and their employer contributions) each year before paying Tax on the contributions made. The Life Time Allowance is the total amount an individual’s pension fund can be before they pay additional Taxes on their pension benefits. What Has Changed? The Annual Allowance has increased from £40,000 per annum to £60,000 per annum. The Lifetime Allowance, which was £1,073,100, has been abolished. What Does This Mean for Your Client? If you have a high earning client (often in the public sector where employer contributions are more generous), then your current calculation of lost pension benefits may include deductions for tax under both the Annual and Lifetime Allowance schemes and so may now be materially understated. How Can We Help? Our team have vast experience in assessing pension loss claims for all types of occupations and are fully au fait with the changes to the Tax rules from April. We would be happy to carry out a review of your pension loss calculations either on a stand alone basis or in conjunction with other relevant heads of claim.
Our opening times over the Festive Period are as follows: Friday 23rd Dec - 9am to 3pm Monday 26th Dec - CLOSED Tuesday 27th Dec - CLOSED Wednesday 28th Dec - 9am to 5.30pm Thursday 29th Dec - 9am to 5.30pm Friday 30th Dec - 9am to 3pm Monday 2nd Jan - CLOSED Tuesday 3rd Jan - 9am
You will be aware of recent changes to Corporation Tax, Income Tax and Dividend tax rates and allowances following the Mini Budget and Autumn Statement. These changes will have an impact on how financial losses are assessed in cases involving Claimants operating through their own Limited Company, particularly those with a larger loss and / or involving dividends. For many years it was safe to assume that the most efficient way to extract additional profits from a Limited Company was by way of dividends. As a result of the recent changes, and depending on the Claimant’s circumstances, this assumption may no longer be the case and alternative methods may need consideration. Our experienced team can assist in all types of cases involving self employed Claimants and we are fully alive to how these changes will impact on how financial losses are presented in a case. Contact us today if you have an ongoing or potential case that you may like to discuss. There are also many other factors that will need to be carefully considered, such as: Has the company suffered a reduction in profitability, or has it ceased trading entirely. The level of actual and expected profitability of the company and the impact on its marginal corporation tax rate. Does the Claimant have other income sources that may utilise their personal allowance and affect their marginal rate of income tax. Is the Claimant expected to work beyond their state retirement age. Does the Claimant have income in excess of £100,000 and, therefore, their personal allowance would be abated (applies to both actual and or expected levels of income). Changes already announced to the tax free dividend allowance. Does the Claimant have other dividend income that would utilise their tax free dividend allowance. To discuss a potential case under no obligation, contact us on 0113 387 5670, email enquiries@forthsonline.co.uk or click here
Quantifying pension losses for members of public sector schemes is complex given the nuances of different schemes. Since the ruling on the McCloud Judgment was made December 2018 there are additional considerations for solicitors to be alive to when assessing pension losses for members of public sector schemes. Who does this affect? Claimants who are members of public sector pension schemes in employment before 31 st March 2012, and were still in employment on 1 st April 2015 (or 1 st April 2014 for LGPS). This doesn’t necessarily need to be a continuous period of employment. This also applies to Claimants who have since left employment, or who have started receiving their pensions, so long as they were employed on the above relevant dates. How does it affect cases? A comparison of claimants’ benefits in their current career average pension versus their potential benefits had they remained final salary members will be required for almost all public sector pension loss cases meaning that both projected and residual benefits will need to be considered in both schemes. For Claimants who have already retired, their actual pension benefits may be increased to take account of these changes – therefore a calculation of their revised actual pension benefits may also be required, in addition to a calculation of their projected pension benefits. Current position: Claimants in active service will move to a career average scheme from 1 st April 2022. When Claimants who haven’t already retired, or aren’t planning to retire in the near future, approach retirement they will be provided with details of their possible pension benefits accrued between 1 st April 2015 (or 1 st April 2014 for LGPS) and 31 st March 2022, in both the legacy scheme (final salary) and the new scheme (career average) and they can choose which benefits to receive. For Claimants who have already retired or will do so in the near future, this choice will be offered as soon as practicable, and any changes to pension benefits should be backdated. How can we help? As most Claimants will want to seek to optimise their benefits, this may increase the amount of pension loss claimed in some cases. This is particularly relevant to Claimants who are now approaching retirement age or where they were in the early phases of their employment in 2012. There is no straightforward indicator of who will be better off under each part of the scheme, so a comparison calculation will be needed in all cases where the Claimant was a member of a public sector scheme in the relevant period to ensure that losses are not understated. For more information about hourly rates and deferred payment terms, please contact us today. We assist in all types of Personal Injury and Clinical Negligence cases. To discuss any of the following scenarios under no obligation. Self Employed Claimants – CLICK HERE Pension Loss (Public or Private Sector Claimants) – CLICK HERE Fatal Cases – CLICK HERE Call us on 0113 387 5670
Did you know that we offer White Label / Agency Services when you do not have permission from the Court to formally appoint an Expert in quantum. We have developed this service for complex and high value personal injury and clinical negligence cases that can be problematic and time consuming. There are generally two scenarios in which this service can be beneficial: You have been denied formal leave by the Court to appoint an Expert in quantum. You want to outsource the quantum elements of the case due the complex nuances involved and to build a more accurate picture of the client’s losses from an earlier point in the case. We undertake this work across all types of Loss of Earnings, Pension Loss and Loss of Dependency scenarios, on a combined and standalone basis. For example, you have drafted the Loss of Earnings element of the Schedule yourself, but require some input in relation to Pension Loss. It may often be the case that you require some abbreviated calculations to support your client’s losses, and again, we can assist in this regard. For more information about the benefits of our White Label Service, along with hourly rates (which are structured alongside current CJC guidelines) and deferred payment terms, please contact us today: Call : 0113 387 5670 Email: enquiries@forthsonline.co.uk
Cases involving ill health retirement are complex by nature and our experienced team are fully au fait with all the different nuances. Whether a Claimant qualifies to receive an ill health pension will be defined by the severity of their injuries resulting in an inability to perform their working duties. The Claimant’s ability to receive an ill health pension will also be subject to pension scheme rules and criteria. Generally, the outcome will be determined by the Claimant’s individual circumstances, and whether they are entitled to receive a pension unreduced or with enhanced benefits and how this interplays with their loss of earnings claim. There are a number of cases which have formed how Claimants who are unable to return to work following an accident or negligence are compensated. Parry v Cleaver (1970) In this case it was held that the Claimant was entitled to receive the full net value of the ill health pension, and that the pension should not be deducted from the loss of earnings up to normal retirement age. Longden v British Coal Corporation (1997) The circumstances in this case related to the Claimant taking a tax free pension lump sum, in a similar vein to Parry & Cleaver, the Claimant only had to offset the post retirement age element of lump sum received early against their losses. How can we assist? Our experienced team can assist in all types of cases involving ill health retirement in consideration of both public and private sector employed Claimants. To discuss a potential case, call us on 0113 387 5670, email us at enquiries@forthsonline.co.uk or fill out a Contact Form .
The Covid-19 pandemic has caused difficulty and hardship for many families, individuals and businesses. In these times, we are regularly being asked to consider the impacts of Covid-19 on Claimants in all types of cases. However, in relation to Covid-19, there are so many different factors to consider, so we need to adapt our approach depending on the Claimant’s circumstances. Things to Consider? Should the impact be considered during the period of past loss only, or should we try and estimate an ongoing impact? As we saw with the financial crisis of 2008, these situations do not last indefinitely, and whilst there will always be exceptions, in our opinion, unless there is evidence to support an ongoing / long term impact, then any “Covid adjustment” should be limited to the period of past loss only, with the future loss being pleaded based on “normal” trading conditions. Self Employed Claimants: Is the impact over a limited time frame or could it be ongoing / long term Potentially opportunities created, hence a positive impact Diversification / Change in nature of business trading / profitability Business closure Bankruptcy SEISS claims based upon pre Covid years trading Employed Claimants: Furlough Redundancy / Lost job Employer closure Pensions Loss of an employment in the period of loss that is no longer available due to Covid-19 Bankruptcy Without doubt Covid-19 has brought new challenges to assessing Claimants’ losses and we are already seeing the Courts looking at the impact of Covid-19 on an individual basis rather than applying generic reductions. Our team are on hand to assist in all types of personal injury, clinical negligence and fatal cases. Our approach: There is no uniform approach and we consider all cases depending on the nature of the Claimant’s circumstances. The key to approaching any case where Covid-19 has had an impact, is to ensure that evidence is well sourced and presented, and that arguments and projections are reasonable. If you have a case that you may like to discuss with our team: Call us on 0113 387 5670 Email us at enquiries@forthsonline.co.uk Visit www.forthsonline.co.uk and fill out an Enquiry Form
The Claimant was a head teacher, with a projected final salary of £105,000. Based on her projected pensionable service, she would have received a gross pension of £60,000 per annum from her retirement. She has actually received an ill health pension of £50,000 per annum, and so her annual pension loss, before Income Tax, appears to be £10,000. However, due to salary increases towards the end of her career, the Claimant’s projected pension benefits for AA purposes increased significantly. The excess pension accrued over the annual limit would be subject to tax at the Claimant’s highest tax rate, and would have led to total tax charges of £26,000 during the period of loss. Due to ‘Scheme Pays’ arrangements, these tax charges would initially be paid by the Teachers’ Pension Scheme, and clawed back by a reduction to the Claimant’s pension, of £1,600 per year. In addition, the Claimant’s total pension benefits for LTA purposes exceed the current lifetime limit of £1,073,100. As the Claimant would not have taken a pension lump sum, the excess pension over the LTA would be subject to a tax charge of 25%. Again, due to Scheme Pays arrangements, this tax charge would be paid by a reduction to the Claimant’s pension, of £1,750 per year. No AA or LTA charges would have been applicable to the Claimant’s ill health pension. Therefore, by taking account of the projected AA and LTA charges, the potential annual pension loss, before Income Tax, has reduced from £10,000 pa to £6,650 pa. To discuss a potential case on a no obligation basis, you can: Call us on 0113 387 5670 Email us at enquiries@forthsonline.co.uk Fill out an Enquiry Form