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Drivers involved in accidents may be surprised to find that
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the first call on their compensation is the State, eager to claw back the costs of sick pay and healthcare charges.
Words: Mike Sherrington
Receiving an insurance settlement after a serious accident resulting in loss of income might not be as helpful as drivers anticipate. This is because the government can claw back any social security benefit paid during the time individuals are unable to work.
Commercial Motor has been contacted by one such HGV driver who was involved in an accident that was not his fault.
During the time he was unable to work, he received around £10,000 of state benefits. He was shocked to find that this money had been taken off the final settlement when his insurance company finally resolved the claim.
The insurance company could legally do this because of the provisions of the Recovery of Benefits Act 1997 administered by the Compensation Recovery Unit of the Department of Work and Pensions.
The unit is perhaps better known for recovering National Health Service charges resulting from road accidents. It now also recovers social security benefits paid as a result of an accident, injury or disease where a compensation payment has been made.
In other words, if an individual is unable to work because of an accident and is compensated by both the state benefit system and the insurance company for their time off work, the government can claim back the amount of state benefit paid to them.
In some ways, the driver who contacted CM was fortunate, Under the provisions of the 1999 Road Traffic (NHS Charges) Act, which was amended in 2007, the same recovery unit can now take back healthcare charges and even the cost of the ambulance used to take the driver to hospital. This applies if the individual has a personal injury policy, irrespective of whether or not they were responsible for causing an accident.
The fate of the aggrieved driver is not uncommon. In the last financial year 2007/08, the Compensation Recovery Unit dealt with 732,750 cases, including 551,905 cases resulting from road accidents, and recovered a staggering £142m, This money is mainly returned to healthcare trusts.
It is unusual, however, for this recovery to come direct from the insurer without the individual knowing about it.
Malcolm Tarling, a spokesman for the Association of British Insurers, says: "Insurance companies tend to investigate if there is a valid claim and pay up in accord ance with the provisions of the policy. Whether or not an individual has to pay back state benefits is between him and the state.
Variable compensation
The amount of compensation an individual will be awarded from their insurer largely depends on the policy they have taken out.
Some policies stipulate set amounts for the loss of a limb, but quite often, it is up to the courts to decide how much an individual will receive. lithe person is unhappy with the settlement granted by the courts, they have the right to appeal, but, usually, these appeals are heard only On points of law.
Some policies include loss-of-earnings payments, or individuals can take out separate loss-of-earnings policies. Loss-of-earnings payments have to be based on fact and are much easier to calculate for those drivers employed by a haulage firm and who receive a regular weekly pay cheque. For owner-drivers and self-employed drivers working on a number of different short-term contracts, they are much harder to calculate.
There also remains the question of how best should a situation be dealt with in the workplace, where a driver is involved in a serious accident that stops them from working for a length of time.
Ruth Pott, the Road Haulage Association's director of legal affairs, says: "The first thing to consider is where the accident takes place. If it is a workplace accident, there is a legal obligation for the employer to report it to the Health and Safety Executive under the reporting injuries, diseases and dangerous occurrences legislation. This does not apply if a driver is injured in a road accident."
Pott says that companies have the right to dismiss injured drivers because of reasons of capability (they are unable to do their job) or because they have had their Licences revoked because of the accident. To do this properly, there should be a hearing where the driver is represented. The problem arises if the driver is too badly injured to attend the hearing, but then a modified procedure applies where the company writes to the driver explaining what it is doing. Injured drivers will also receive sick pay. This can be either part of a contractual entitlement or statutory sick pay Statutory sick pay • It lasts for up to 28 weeks • It is worth £75.40 a week If drivers are unable to resume driving duties, companies should, wherever possible, try to find them alternative employment. However, this might not be possible in a small company. Failure to do this could result in the driver bringing a claim under the Disability Discrimination Act and will be successful if it can be proven that the company has not made reasonable adjustments to take account of the new circumstances, warns Pott.
Union assistance
Drivers may receive help from their unions in dealing with the circumstances arising from accidents. Members of the United Road Transport Union have only to fill in a compensation claim form and then the case is passed directly to the union's solicitor.
Union officials will get involved only if the driver is fit enough to return to work, but not to driving duties, and will then try and get the company to find alternative employment The union will also represent the member if the company attempts to dismiss them because they are no longer able to work.
However, despite help from the unions, it is obviously best that accidents are avoided, because not only will drivers probably have to pay back the state benefits they receive, but they could also lose their jobs. •