Date:   28 February 2007

COMPENSATION RECOVERY UNIT - AN OVERVIEW

What is it?

A department of the DWP created to recover:-

• Social Security benefits paid as a result of an accident, injury or disease where a compensation payment has been made.
• The costs incurred by NHS hospitals for treatment following road traffic accidents.

The Unit in Practice

When a compensation claim for injury or disease is made the proposed defendant is required to register the claim with the Compensation Recovery Unit (CRU) in Newcastle-Upon-Tyne.

If the injured person receives compensation and has also received a Social Security benefit as a consequence of the accident, injury or disease, the compensator is required to reimburse the DWP this benefit .The amount to be paid is the total benefit paid from the day after the accident or injury until the date of final compensation or five years – whichever is earlier.

• If the payment is in respect of a disease, the amount to be repaid is calculated from the day the benefit was first claimed because of the disease.
• The compensator has a right, in certain circumstances, to offset the amount of benefit against a particular part of the compensation payment.

Can benefits be offset?

General damages are ‘ring fenced’ and so no deduction of benefits can be made from  general damages.

If a claim includes certain financial losses e.g. lost income then particular types of benefit e.g. Industrial Injury Benefit can be deducted from the claimant’s damages but must be refunded by the compensator to the State.

Not all types of benefit are deductible from losses claimed but it is not possible in this short overview to deal with such in detail.

What if the information on the certificate is inaccurate?

Either the claimant or the compensator prior to settlement may apply to review the certificate. The review is a paper exercise completed by the CRU based upon documents and representations put forward by the claimant/compensator.

Can the sum requested by the CRU be appealed?

The simple answer to this is yes.  A certificate can be appealed by:-

• The compensator
• The injured person or the person the compensation has been to, but only if the compensation payment has been reduced to recover benefits paid
• Someone acting for the compensator with their authority

The Appeal

An appeal is made to the CRU in a prescribed form and can only be made once the benefits have been paid and the compensation claim concluded.

It must submitted within one month of payment of the benefits failing which, other than in extremely exceptional circumstances, the right to appeal will be lost.

The unit will reconsider their position and either allow the appeal on review or refer the papers to The Appeal Service.

Types of Appeal

Appeals can be paper or oral.

• A paper appeal will go before a tribunal and considered on its merits without the need to attend a hearing.

• An oral appeal  - evidence can be called and representations made to a tribunal.

Reasons for Appeal

An appeal can only be considered if one or more of the following applies;

• the certificate includes an amount, rate or period that is wrong
• the accident, injury or disease was not the reason the benefits shown on the certificate were paid
• the certificate includes benefits that were not paid and are not likely to be paid to the injured person
• the compensation payment was not because of the accident, injury or disease.

The appeal must be supported by the case documents, including medical evidence of both parties and pleadings.

Conclusion

In conclusion it is always important to consider whether it is appropriate to raise an appeal and in view of the strict time constraints it is good practice to consider this prior to settlement.

With appropriate medical evidence and in appropriate cases the CRU are sympathetic on review as are the tribunal upon an appeal.  I have had a great many cases where substantial repayments of benefits have been made to insurance clients, much to their pleasant surprise!

Stephen Styles