Claiming Compensation and the CRU: The Facts
If you have had an accident, an injury or a disease for which someone else is to blame, you may want to claim compensation. As part of this process your claim must be registered with the Compensation Recovery Unit (CRU). In this guide we answer all your questions and take you step by step through the process.
Claimed or received compensation?
If you have had an accident, an injury or a disease for which someone else is to blame, you may want to claim compensation. As part of this process your claim must be registered with the Compensation Recovery Unit (CRU). The CRU is a Government Body, which records all benefit payments you may receive from the Department of Social Security consequential on your injury.
Received a social security benefit because of your accident, injury or disease?
If the answer is ‘yes’ then the benefits may be set off against your compensation. The Social Security (Recovery of Benefits) Act 1997 governs the principle behind it: basically that a person should not be compensated twice over in respect of the same accident, injury or disease. In other words you will not stand to gain or lose by your claim but will be put back into the position you would have been had the accident not occurred.
When someone claims compensation it is the responsibility of the person who caused the injury or, more commonly, their insurer, to tell the CRU. This is why we ask you for the necessary details in our initial questionnaire documents.
What must the compensator pay back?
The other party is liable both to pay damages to the injured person and to repay benefits and or lump sum payments to the DWP. Consequently, if you have had benefit to meet the same need, then the compensator may reduce your compensation.
Before making a compensation payment (other than an exempt payment) the other party’s insurers must apply to the CRU for a Certificate.
The CRU must issue the Certificate within 28 days from the date of receipt of a request which contains all the required information.
If after a Certificate has been issued, CRU become aware that a recoverable lump sum payment has been paid, a revised Certificate will be issued to include the lump sum payment amount and will supersede all previous Certificates.
Money matters:a) The relevant recovery period
b) What is deductible?
- The amount the compensator has to pay the DWP equals the total benefit you are paid from the day after the accident or injury to the date of the final compensation payment or for up to 5 years- whichever is earlier.
- If you have claimed benefit because of a disease, the amount the compensator has to pay is worked out from the day you first claimed a benefit because of the disease.
The compensator can only reduce your compensation in the past if you have had benefits to meet the same need. Heads of compensation are defined in Schedule 2 to the Social Security (Recovery of Benefits) Act 1997.
There are 3 types of claims and deductions:
- Loss of earnings
- Loss of mobility
Nursing care and attendance (including holiday/respite care) and travel to hospital for treatment and additional costs of travel may also fall within Schedule 2.c) What is not deductible
Compensation for other reasons, such as pain and suffering, cannot be reduced in any circumstances.
Furthermore where the amount of compensation in respect of a particular head of compensation is less than the amount of a listed benefit to be recovered, the compensator is liable to pay the difference. They may not reduce payment against any other head of compensation to take account of the recovery of a listed benefit.d) How compensation is deducted
The House of Lords in Wisely v John Fulton  1 W.L.R. 820 makes it clear that when assessing damages the court should effectively ignore the presence of benefits.This means that the like for like benefits can be deducted only once the full schedule of loss has been calculated.Action point; if you are receiving benefit you must tell the office that pays your benefit as soon as you get your compensation.
An example of how CRU works
For example, let’s say a Claimant who works as a chef injures his hand as a result of a Defendant’s negligence in causing a car accident. Following the accident the Claimant has trouble flexing his hand. There is medical evidence which supports the Claimant’s claim and predicts that the Claimant’s injuries will not permit him to work for eight months.
As the Claimant is unable to work as a chef for this period of eight months he will receive benefit payments. The CRU is entitled to recover benefits in relation to payment of these benefits which were received by the Claimant during this eight month period. In this case CRU is recovered from the negligent driver’s insurance company.a) Compensation
As award of compensation of £50,000 is broken down as follows:
- £20,000 for general damages (pain and suffering)
- £15,000 for loss of earnings
- £15,000 for loss of mobility
A CRU certificate lists Incapacity Benefit totalling £3,000, Income Support totalling £5,000 and Disability Living Allowance (DLA) (Mobility Component) totalling £5,000.c) Deductions
d) Total award
- The insurer may not offset against the general damages element of the award.
- Incapacity benefit and Income Support can be offset against the loss of earnings compensation. Therefore a total of £8,000 can be deducted from the loss of earnings sum leaving £7,000 to be paid to the injured person.
- Equally the insurer may offset the £5,000 DLA against the loss of mobility head of compensation leaving £10,000 for compensation.
The injured chef has settled his claim for a total of £50,000. Following offsetting he receives £37,000 in addition to the £13,000 he has already received from state benefits.
Finally, if you are awarded compensation:
Check the facts!
The CRU sends a certificate of recoverable benefit to the compensator and a copy of the certificate to you as the Claimant. The certificate shows how much benefit the compensator has to pay back to the DWP. However, this is not the end of the story...
(i) If you do not agree with the information on the certificate
, you have the right to ask for a review.
(ii) If you do not agree with a decision to reduce your compensation
, you may be able to appeal. (Please bear in mind that appeals can be made only after the compensator has reduced your compensation to repay benefit to the DWP. Appeals must be within one month of the date that the compensator makes the final payment of benefits to the CRU).
You are not alone...We are here to help, so call us and we can explain it in more detail.