What is the compensation recovery scheme?
If you have brought a civil claim in respect of an injury, accident or disease, you may have received a Compensation Recovery Unit (“CRU”) Certificate, detailing how much you need to pay back to the government from your injury compensation claim. Here are five things you need to know about the compensation recovery scheme (“CRS”).
- The CRS is there to recover certain benefits
If an individual has an accident, suffers an injury or disease, they may receive state benefits as a result.
If the individual is eligible for compensation, the compensator (who in a civil claim will be the defendant, or their insurers) who makes the payment will be liable to the CRU for the total amount of ‘recoverable benefits’.
Recoverable benefits are those social security benefits that are listed in Schedule 2 of the Social Security (Recovery Benefits) Act 1997 and paid in the relevant period. They include, for example, Universal Credit and Employment and Support Allowance.
- You cannot be compensated twice for the same loss
The purpose of the CRS is to ensure that the claimant is not compensated twice for the same loss (known as the rule against ‘double recovery’). The purpose of a claim is to try to put you back in the position you would have been in before your injuries, if the accident, injury or disease had not happened. The CRS is there to avoid you being placed in a better financial position at the end of the claim, than you otherwise would have been.
- The compensator must refund the CRU (subject to limits)
As the compensator may be liable for your injuries, if you win your claim, they will be required to refund the cost of any benefits paid out to you, to the CRU.
There are limits to this however, and this only applies to three types of compensation:
- Compensation for loss of earnings;
- Compensation for cost of care; and
- Compensation for loss of mobility.
Meaning that if you have not made a claim for any of these categories of damages, then there is no requirement for the compensator to repay any monies to the CRU.
A further limitation on the requirement to reimburse the CRU, is that these losses must have happened during the relevant period i.e beginning:
- on the day following an accident or injury; or
- in the case of disease, the date that a listed benefit is first claimed in consequence of the disease, and ending on:
- the day a compensation payment is made in final discharge of a claim;
- the day an agreement is made between the compensator and the injured person under which an earlier compensation payment is treated as having been made in final discharge of any claim; or
- the date five years after the relevant period begins, whichever comes first.
The compensator must inform the Department for Work and Pension (“DWP”) of a potential claim within 14 days of receiving a claim.
- You can challenge a CRU Certificate
The CRU will provide the compensator and the claimant’s solicitors with a breakdown of recoverable benefits, showing week by week details of the total of each recoverable benefit. This is provided in the form of a ‘Certificate’.
You can challenge this calculation in two ways:
- By review
- By appeal
If you seek a review, you can do this at any time. The request should be made in writing and set out the grounds on which the review is sought. You can advance a request for a review of the CRU Certificate on the following grounds:
- it was issued in ignorance of, or was mistaken as to, a material fact;
- a mistake was made in preparation of the Certificate;
- the lump sum payment recovered from a compensator is in excess of the amount due to the CRU;
- the CRU was provided with incorrect of insufficient information at the time;
- an appeal has been made; or
- a certificate has been issued, and for any reason, a recoverable lump sum payment was not included in that certificate.
Once the CRU receives a review request, it will check all benefits and lump sum payments made to you and review the period in which they are likely to have been paid.
The CRU may refuse to revoke the Certificate. If they do, you can ask them to re-consider the decision, known as a ‘mandatory reconsideration’. After this has taken place, you can move to the appeal stage.
An appeal against a CRU Certificate can be made on the grounds that:
- any amount, rate or period specified in the certificate is incorrect;
- the accident, injury or disease was not the reason benefits and/or lump sum payments shown on the certificate were paid and they should not have been included;
- the certificate includes benefits and/or lump sum payments that were not paid and not likely to be paid to the injured person; or
- the compensation payment was not because of the accident, injury or disease.
- Your damages may be reduced/extinguished by a CRU ruling
It is important to be aware that the figure quoted by the DWP in the certificate may have the effect of extinguishing any damages payable to you, particularly if you have been in receipt of the recoverable benefit for many years in respect of the injury, accident or disease.
It is therefore important to be sure that the figures are correct, and to seek legal advice promptly.
Our lawyers at Saunders law are experts in actions against the police and public authorities and we are passionate about assisting members of the public to protect their rights. For advice about making a claim against the state, or if you have been affected by any of the issues mentioned above, please contact us on 020 7632 4300 to discuss your concerns.