Response to consultation on the definition of “significant personal injury" Background 1. Directive 2005/14/EC (the fifth motor insurance Directive) provides at Article 2 that: “Member States may limit or exclude the payment of compensation by the compensation body [in the UK, the Motor Insurers’ Bureau] in the event of damage to property by an unidentified vehicle. However, where the [Motor Insurers’ Bureau] has paid compensation for significant personal injuries to any victim of the same accident in which damage to property was caused by an unidentified vehicle, Member States may not exclude the payment of compensation for damage to property on the basis that the vehicle is not identified. Nevertheless, Member States may provide for an excess of not more than EUR 500 for which the victim of such damage to property may be responsible. The conditions in which personal injuries are to be considered significant shall be determined in accordance with the legislation or administrative provisions of the Member State in which the accident takes place. In this regard, Member States may take into account inter alia, whether the injury has required hospital care.” 2. In effect, this means that Member States may limit or exclude payment of compensation for property damage by an unidentified vehicle, so long as no compensation for significant personal injuries has been paid to any victim of the same accident. In order to give effect to this provision in Great Britain, we need to adopt a definition of “significant personal injury”. The consultation 3. The Department for Transport consulted on 21 May 2009. As the basis of the consultation was narrowly focussed on the definition of significant personal injury, the period for response was set at 6 weeks rather than the usual 12 weeks. Five questions were asked in the consultation paper; for the purposes of consultation the Department proposed to define “significant personal injury” as injury as a result of which “a continuous stay in hospital of 6 days or more within 48 hours following the accident” occurred. 4. Responses were received from: the Association of Personal Injury Lawyers (APIL); the British Insurance Brokers Association (BIBA); the Motor Insurers’ Bureau (MIB); Thompsons Solicitors; and the Welsh Assembly Government. 5. To take account of suggestions made by respondents, we extended the period of consultation for one month to end August 2009, and invited response from Headway (the brain injury association) and from the Spinal Injuries Association, both of whom provided their views. Response to consultation questions: Key points made by respondents 6. Question 1. The Department’s aim is to balance the need to compensate in genuine cases with the need to prevent fraud, and that compensation for property damage claims should be appropriately and proportionately targeted. Are there general considerations which you feel the Department has not taken into account? If so, what are they and in what ways should they be taken into account? 6.1 Responses were mixed. It was suggested by APIL that the Department had set the bar too high, and that there was nothing in the Directive to suggest an intention to limit property damage claims to cases involving serious injury. APIL proposed a definition that would set the threshold high enough to prevent risk of fraud but low enough to enable honest victims whose property had been damaged by unidentified vehicles to claim the compensation intended. Thompsons took the view that in law any injury which is not insignificant is significant, so that a definition linked to 6 days’ continuous stay in hospital fundamentally misunderstands the legal definition of significant personal injury. 6.2 BIBA agreed with the Department’s aim, but believed that the definition needed to be extended to include fatalities as well as significant personal injury, and that more attention needed perhaps to be given to cases where non-injured parties submit claims for damage to property, as this is where potentially fraudulent claims are more likely to arise. The MIB agreed that a balance has to be struck between countering fraud and the compensation of genuine victims. A general suggestion made was to enhance evidence-gathering at the scene of the accident, including placing reliance on the police incident report as confirmation of the injury resulting from the incident. BIBA thought that fraud is more likely where the circumstances of the incident are unclear, so that evidence-gathering at the scene will be important. 6.3 Headway, as a general comment believed it vital that the DfT revised its plans, and that it needed to develop an alternative mechanism for classification of injuries which is based on clinical assessment. By relating the definition of significant personal injury to length of hospitalisation and treatment, they believed many people suffering brain injuries were likely to endure additional hardship and suffering. 6.4 As a general comment, The Spinal Injuries Association believed that the proposed definition would adequately cover the majority of cases of spinal cord injury. However they anticipated that there could be incidents where a spinal cord injury occurred that would not be considered a significant personal injury under the proposed definition. The Department’s response 6.5 The Department’s aim in defining “significant personal injury” is to find an appropriate and workable formula which will as far as possible simultaneously provide compensation to legitimate victims and yet will be effective to deter fraudulent claims on the guarantee fund. Such fraudulent claims, as the Directive recognises, are a particular risk in cases where the vehicle that is said to have been to blame remains unidentified. We do not believe that the Directive requires the definition of “significant personal injury” to be aligned with the definition of “significant injury” which already forms part of national law (as contended by Thompsons). Recital 12 of the Directive refers to Member States “establishing” the conditions in which personal injuries are to be considered significant and when, read alongside the latter part of Article 1.6 of the Directive, it emphasises that it is left to Member States’ discretion to define significant personal injury. Therefore we believe we are not bound by the definition of any similar term that currently exists in national law. In addition, we think that a definition of significant injury for the purposes of a threshold “knowledge provision” such as that in the Limitation Act 1980 is a provision for a wholly different (and in no way equivalent) purpose. 6.6 We note that most respondents felt a threshold should be set in order to avoid fraudulent claims. We agree with BIBA that fraud is most likely to occur where insufficient evidence is available to establish the events of an accident. BIBA suggested use of the police incident report to confirm that the injury resulted from the incident in question. We have considered whether police reports of accidents could be potentially useful in this respect. In general, the police will make a record of all accidents they attend. Understandably, accidents which may result in a coroner’s inquest or criminal proceedings will receive the greatest level of investigation and documentation by the police. This leaves a proportion of accidents which may not fall into either of these latter situations and the level of information collected is at the discretion of the police. In view of this we do not consider that the police report alone can reliably be used to prevent fraudulent claims. We therefore conclude that further criteria are warranted. 6.7 Finally we agree with respondents’ suggestions that fatalities should be included in the definition of significant personal injury for the purpose of property damage claims. 7 Question 2. The Department intends to link “Significant Personal Injury” to evidence that a stay in hospital has occurred, on the basis that those requiring hospitalisation are likely to be the most seriously injured. Do you agree? If not, then what alternatives which meet the Department’s criteria would you suggest? 7.1 The response was again mixed on this point. APIL believed that the DfT’s proposal was not consistent with the intention behind the relevant clause in the Directive, to update and improve the protection of victims. Thompsons also disagreed. They argued that different people experience similar injuries differently, and that not all significant or serious injuries will be immediately detectable and treatable in hospital, or for six days or more starting within a given period. 7.2 Headway said that a large proportion of brain injuries which have devastating, lifelong effects can result from an injury needing very little in-patient treatment in the early stages. They observed that the full effects of a brain injury can take some time to become apparent, a fact which is reflected in the long assessment phase of most personal injury claims involving head trauma. 7.3 BIBA did not disagree with the principle, but felt that the period of hospitalisation should not be the sole factor. The Welsh Assembly Government agreed with the proposal and the MIB strongly agreed, pointing out that this was in line with the position taken by a number of EU countries, and provided a degree of consistency. The Department’s response 7.4 The Department fully supports improving protection for victims but believes that this must be achieved in a way so as to deter fraudulent claims. We consider that it is appropriate to have a definition which includes admission to hospital as a criterion as it is an event which can be independently verified and will therefore reduce the risk of fraudulent claims. Indeed, the Directive expressly permits Member States to take into account whether an injury has required ‘hospital care’. We therefore propose that admission as an in-patient to hospital should generally be evidenced through the Certificate of NHS Charges obtained from the Compensation Recovery Unit in accordance with the Road Traffic (NHS Charges) Act 1999. 7.5 We appreciate that injury will affect individuals differently and some injuries will not be immediately apparent at the time of the accident. We also accept that admission as an in-patient may depend to an extent on locality and the availability of hospital beds. However, our aim in defining significant personal injury is to achieve consistency in applicability; it is not possible therefore to define criteria which cover all cases and eventualities. However, in recognition that some injuries may not be immediately apparent we propose that admission to hospital as an in-patient should occur within 30 days of the accident (also see paragraph 10 below). 8. Question 3. The Department intends to define “Significant Personal Injury” to a stay in hospital and that such stay would be six days or more. Do you agree that this is the appropriate number of days? If not then what do you consider to be appropriate and why? 8.1 Responses were still more varied on this issue. APIL believed that the proposal set the threshold too high, and that by effectively changing “significant” to “serious” the Department was unilaterally trying to change the effect of the Directive, so potentially leading to Francovich claims. They suggested wording such as “independently verified symptoms lasting at least two weeks.” Thompsons contended that significant injuries will rarely require 6 days of hospitalisation, but may require months of treatment and rehabilitation. As a general comment, Thompsons considered that the proposals would have serious consequences for the rights of seriously injured people to receive compensation, and they thought the linkage to a stay in hospital dangerously misguided and likely to cause unnecessary complication. 8.2 BIBA suggested that any injury requiring 3 days or more (non-continuous) treatment should be regarded as significant: they proposed that the sole criterion should not be length of stay, and that the aggregate, as opposed to continuous, time in hospital should be counted. Headway thought that to categorise injuries as “slight” based on hospital stay was totally unacceptable. They regarded the proposal as extremely dangerous, running the risk of missing many brain injuries where the patient is mentally stable, conscious and ready for discharge very quickly, but subsequently experiences severe symptoms which have a profound effect on their quality of life, possibly over months, years or a lifetime. 8.3 The MIB were content with a criterion of 6 days stay in hospital following analysis of the in-patient data, but said that 7 days in hospital would be consistent with the definition applied in other EU countries. The Department’s response 8.4 The Department recognises concern from respondents that 6 days in hospital is too long. In the light of this we have looked at available statistics on road user casualties and associated lengths of stay in hospital afresh. This shows that the mean length of hospital stay for all road users (pedestrians, cyclists, motorcyclists, drivers and passengers) is currently 3.5 days. We recognise that the mean figure will be influenced by the number of patients requiring long stays in hospital and that injury and subsequent recovery can both be influenced by age (for example lower body injuries in children are relatively more common in road accidents than for adults and yet they may recover more quickly) and by road user type. The most frequently occurring (mode) length of stay in hospital is one day. The median length of stay (that is the numeric value separating the higher half from the lower half of the sample) is also one day. 8.5 The longer hospitalisations tend to be fractures, including multiple injuries. Approximately ¾ of inpatient stays of at least 4 days are fractures. Many of these involve injuries to the upper thigh, hip, lower back or combinations of these. Injuries which are more superficial in nature such as some dislocations, sprains and strains are less likely to require long stays in hospital; their numbers significantly reduce as a percentage of all road user hospitalisations after one day’s stay in hospital. 1 1 Source: The figures quoted in 8.4 and 8.5 are unpublished analysis of Hospital Episodes Statistics (The NHS Information Centre for Health and Social Care) data for 2007/08. 8.6 The Department considers that there is no easy way to prioritise severity of injury by injury type. We believe therefore that the most straightforward and workable option is to look at the number of days that the victim is required to stay in hospital. We propose that the length of stay in hospital should be 4 days: such a period, set just above the mean average stay for road users, should be a sufficiently low threshold to include significant personal injuries while being high enough to exclude most lesser (or feigned) injuries. 9 Question 4. The Department proposes that the applicable length of treatment should be continuous. Are there circumstances where you believe there should be more flexibility? If so, what would they be and what would you propose as an alternative in these circumstances? 9.1 The responses received on this point were few, but disagreed with the Department’s proposal. Thompsons pointed out that many significant and serious injuries require ongoing but not continuous treatment. BIBA suggested that the decision should not be made on the “first contact” with a hospital and initial assessment, but instead should be based on the overall time spent in hospital (not continuously) over a period of say 30 days. The Department’s response. 9.2 The Department recognises that some injuries will require on-going treatment possibly over a long period of time. It is important to bear firmly in mind that what is at issue here, however, is not compensation for personal injury. Where compensation is assessed as due for personal injury (whether or not the injury meets the definition of “significant personal injury”) such assessment and compensation is not affected by the definition of “significant personal injury”. At issue is, rather, compensation for property damage where “significant personal injury” has occurred. 9.3 Comments in response to the consultation queried our definition of “continuous”. To clarify we wish to allow for situations where there has been continuity of in-patient treatment in one or more than one hospital (so therefore our intention is to avoid a definition which implies a single continuous stay in only one hospital). We also want to allow for situations where a person was for example admitted as an in-patient and discharged on Day 1only to be re-admitted as an in- patient on Days 2, 3 and 4 because new or further medical conditions linked to the accident but not apparent on Day 1 manifested themselves. We therefore consider that length of treatment is most appropriately measured in terms of consecutive in-patient stays. 9.4 In addition, we consider that evidence that such treatment as an in-patient has occurred can in most cases be based on the Certificate of NHS Charges obtained from the Compensation Recovery Unit and in accordance with the Road Traffic (NHS Charges) Act 1999. 10 Question 5. The Department intends that the definition for “Significant Personal Injury” will be 6 days or more continuous treatment in hospital and that the treatment should occur within 48 hours following the accident. Are there circumstances where you consider greater flexibility is required between the time of the accident and that of the continuous stay in hospital? If so, what are these circumstances, and how would you propose to specify greater flexibility to accommodate these circumstances in the most appropriate way? 10.1 Responses were mixed on this point. Thompsons suggested that DfT should drop the proposals: claimants whose property has been significantly damaged should be compensated for the damage and consequential loss, without linkage to “significant personal injury”, and the significance of any injury should be determined by symptoms, medical reports and outcome, not by some ill-conceived idea of length of hospitalisation. 10.2 APIL considered that under the DfT proposals individuals with a severe whiplash injury or a mild to moderate brain injury might be discharged from hospital without identifying any need for immediate treatment. BIBA suggested that some leeway is perhaps required to allow for late developing symptoms: relevant circumstances might include: an initial stay in a foreign hospital; blood clots developing after the incident; later return e.g. to have a leg pinned; and misdiagnosis. 10.3 The MIB stressed that from a claims handling perspective it is important to establish as early as possible whether “significant injury” is involved and to have this validated independently e.g. by the treating hospital, otherwise uncertainty may delay dealing with claims, to the detriment of the potential claimant. 10.4 The Spinal Injuries Association explained that in some circumstances a spinal cord injury may not occur at the time of an accident, but may later be brought about by the injuries sustained in one. They also indicated that hospitalisation may not be possible within 48 hours of the incident due to the remoteness of the incident, so that injuries requiring continuous treatment in a hospital might be discounted solely because the hospital cannot be reached within the allotted period. They proposed that the wording be amended to read “the treatment should occur within 48 hours following diagnosis of the injury”. 10.5 As a general comment BIBA thought that a majority of significant injuries would result in immediate transfer to hospital from the scene of the accident, but a 30 day period to allow for late-developing symptoms would be appropriate. The Department’s response 10.6 We recognise that some serious injuries may have symptoms which do not manifest themselves at the time of the accident but some time afterwards. We have considered whether the point at which a significant personal injury is deemed to commence should be at the time of diagnosis rather than the accident. However, we consider this could lead to further confusion in practice over who makes the diagnosis and at what point the diagnosis is confirmed. If the injury was only diagnosed some considerable time after the accident then it might be difficult to prove causation. 10.7 However, we agree that there may be circumstances where symptoms are not apparent until some time after the accident and are perhaps not diagnosed immediately. We therefore propose that hospitalisation should occur within 30 days of the accident. 11. Other Issues 11.1 Withholding “excess”. The 5th Motor Insurance Directive allows Member States to determine the conditions in which personal injuries are to be considered significant, and permits Member States to apply an excess of not more than EUR 500 for which the victim of property damage may be responsible. The Department proposed in the consultation document that it intended to apply such an excess and that the excess would be £300 (€435 at current exchange rates). No comments were received on this point and we therefore intend to proceed as proposed. Summary 12. Assessment and compensation for personal injury (whether or not the injury meets the definition of “significant personal injury”) is not affected by the definition of “significant personal injury”. 13. The Department considers that it would be unrealistic and prohibitively expensive to determine in each case whether “significant personal injury” has occurred by reference to detailed medical evidence. It should be borne in mind that the costs of settling such claims, although paid initially by the MIB, are ultimately added to motorists’ insurance premiums. Moreover, we believe there is a real danger of fraud in relation to claims where the vehicle that is said to have been to blame remains unidentified. Therefore we consider it is appropriate to make use of the “significant personal injury” criterion to reduce the likelihood of fraudulent claims on the guarantee fund. Having considered the responses, no respondent was able to propose a fairer or more workable formula which met the Department’s objective to simultaneously provide compensation to legitimate victims and yet be effective to deter fraudulent claims on the guarantee fund. 14. The question then to be addressed is: what should be the definition of significant personal injury which should be applied? Respondents have indicated that the original proposal of a single continuous stay in hospital immediately after the incident giving rise to injury was likely, if used as the single criterion, to omit deserving cases for a number of reasons, and that these might include instances of serious personal injury and consequent disadvantage. We also recognise that some other EU Member States adopt a definition of seven days in hospital, and that this gives a general indication of a possible appropriate level of threshold; we see no reason to be bound absolutely by such practice, however, and we favour a somewhat more flexible approach. At the same time we want a measure which is clear and straightforward to administer. Conclusion 15. We therefore propose to proceed on the basis of a definition which relaxes the simple originally proposed criterion of a six-day continuous stay in hospital starting within 48 hours of an accident, while still excluding potentially fraudulent applications and instances of relatively minor or trivial injury. It is worth noting that the fifth motor insurance directive uses the term “significant personal injury” whereas the 2003 Untraced Drivers’ Agreement, which will require amendment in order to implement this change, refers to “bodily” injury throughout. These terms are synonymous and we will retain “bodily” injury in our definition to ensure consistency. 16. We conclude that the definition of “significant personal injury” should be “bodily injury resulting in death or for which 4 days or more of consecutive in-patient treatment was given in hospital, the treatment commencing within 30 days of the accident.”. In most cases it will be possible to determine the length of in-patient treatment by referring to the Certificate of NHS Charges obtained from the Compensation Recovery Unit and in accordance with the provisions originally set out in the Road Traffic (NHS Charges) Act 1999. .