Section 1 of the Road Traffic (NHS Charges) Act 1999 imposes an
obligation on Compensators in road traffic accident claims to pay
appropriate NHS charges to the Secretary of State in respect of any
treatment administered to the Claimant at an NHS Hospital as a
result of injuries sustained in that accident.
Section 1(3) of that Act defines the three situations in which
payment in settlement of a claim, whether in whole or in part, is
considered a compensation payment:
1. a payment made by an authorised insurer under, or in
consequence of, a policy issued under section 145 of the Road
Traffic Act 1988; or
2. a payment made by the owner of the vehicle in question in a
case where they have paid a deposit or security to the Court under
part VI of the Road Traffic Act 1988; or
3. A payment made in pursuance of a compensation scheme for
motor accidents.
The result of the manner in which this legislation was drafted
is that Compensators who have a high policy excess and are
therefore effectively "self-insured" do not require to reimburse
NHS Charges. As long as the Compensator does not breach their
policy excess by making the payment, it is not considered to be
made under or in consequence of an insurance policy. The practical
implication is that self-insured Compensators are exempt from
recoverable NHS Charges.
The Compensation Recovery Unit (the CRU) previously required a
letter from the Compensator or their representatives confirming
that the Compensator is effectively self-insured and that they did
not breach their policy excess when settling the specific claim.
Upon receipt of such correspondence, the CRU automatically issued a
Certificate of NHS Charges with a nil balance.
During recent discussions with the CRU however, it has been
brought to our attention that a policy review has been carried out
between the relevant departments within the NHS and CRU. Due to an
increasing number of claims slipping through the net where a
payment was made under an insurance policy on behalf of a
"self-insured" Compensator but a Nil Certificate of NHS Charges was
issued, procedural changes have been implemented.
With effect from May no Compensator will be automatically exempt
from NHS Charges by way of a letter stating that they have not
breached their policy excess. All self-insured Compensators now
require to submit a copy of their insurance policy to be registered
with the CRU which clearly displays the excess applicable. It must
also indicate on what basis this is calculated, for example,
whether it is a "per claim" excess or if it is calculated on an
aggregation of settlements paid.
Self-insured Compensators will therefore require to contact
their insurers or brokers and request a copy of the necessary
policy documentation showing the information outlined above in
order that it may be registered with the CRU. The relevant policy
only requires to be registered once in respect of each Compensator.
Compensators or their representatives will subsequently require to
write to the CRU in every individual case where NHS Charges apply
upon its conclusion in order to confirm that the excess has not
been breached, making reference to the policy previously
provided.
We have also been informed that under a current "NHS expansion
programme" future changes relating to recoverable NHS Charges are
in the pipeline. A wider range of services are being considered for
inclusion under NHS Charges. Furthermore, it has been suggested
that the "poorly drafted" legislation should be amended to include
any compensation payment made, whether under an insurance policy or
not. The practical implication of such a change would be to remove
the present "exemption" for self-insured Compensators, the result
being that they would be liable for any relevant NHS Charges in
each case.
We understand that this consultation process has been delayed,
but we have been put on notice of the recommendations being
discussed. We shall provide updates of any further developments as
and when we are made aware of them.
Contributed by Steven Smart