Warren Collins, solicitor-advocate and partner at Penningtons Manches Cooper, looks at the interplay between the Motability Scheme and the personal injury claim process.
The Motability Scheme is a wonderful resource available to disabled drivers or passengers who are in receipt of the higher or enhanced mobility component of a Personal Independence Payment (PIP), for adults, or Disability Living Allowance (DLA), for children.
The scheme provides a fully insured and maintained adapted vehicle on a three year lease in exchange for giving up the higher rate mobility component of benefits (currently £62.55 per week, equivalent to £271.05 per month), and an up-front payment, the amount of which depends on the vehicle chosen from a wide range of cars.
From this range, some come at no additional cost at all, while the fancier brands may necessitate an additional up-front payment of several thousand pounds. The scheme is the embodiment of ‘pays your money, takes your choice’.
As personal injury lawyers representing seriously injured clients, we know only too well the transportation challenges faced by those with a spinal cord injury. While there have been significant advances regarding accessibility to public transport over the past 20 years or so, the reality for wheelchair users is not always a positive experience. Travelling by bus or train for a wheelchair user is not often a practical option. Taxis are sometimes accessible, but sadly, not universally so.
Our spinal cord injured clients reasonably need the flexibility and reliability of having a suitable and well-maintained car. The Motability Scheme meets these needs for many spinal cord injured wheelchair users; it is, as I have said, an excellent solution.
There is, however, a wrinkle to the scheme so far as personal injury claims are concerned. Here’s the rub:
There are two jurisprudential philosophies enshrined in the law of damages in England and Wales:
This presents a problem with the payment of state benefits, including the mobility component of PIP or DLA. Here, if the accident victim receives both compensation from the tortfeasor (or their insurers) and state benefits in respect of the same loss, they are being paid twice. Such ‘double recovery’ would mean they are no longer in the same financial position they would have been in had the accident not occurred, but instead are better off.
A neat solution to this philosophical lacuna was the introduction of the Compensation Recovery Scheme by virtue of the Social Security (Recovery of Benefits) Act 1997. Under this scheme, insurers are placed under a duty to liaise with the Department for Work and Pensions to ensure that the value of benefits that have been paid by the state, as a consequence of accident-related injuries, are deducted from the compensation before it is paid to the claimant, and repaid to the state. This scheme is designed to avoid the so-called ‘double recovery’ and ensure that it is the polluter and not the state that is paying.
The problem is that there is an apparent clash between the Motability Scheme and the Compensation Recovery Scheme. Consider this example:
Colin is injured in a car accident, caused entirely by Daphne. The injuries entitle him to higher rate PIP. Colin makes a claim for compensation against Daphne and her insurers. Colin’s claim, quite legitimately, includes a claim for the cost of a suitable vehicle.
Over the past two years, while his claim is ongoing, Colin has been leasing a BMW 218 car through the Motability scheme. He has paid an up-front payment of £3,500, but thereafter the cost of the car has been ‘free’ to him under the lease – in exchange for the higher rate component of his PIP. So far as Colin is concerned, his loss to be claimed is the initial down payment. So far, so good.
However, when it comes to the end of his claim, the value of his state benefits, including all of his PIP, will stand to be deducted from his damages. The analysis here, is that rather than there being ‘double recovery’, there will be ‘double deduction’ – because Colin has already lost the value of the higher rate component of his PIP once under the Motability Scheme, and this will then be deducted again under the Compensation Recovery Scheme.
One solution would be to avoid using the Motability scheme while a claim for compensation is ongoing. The Compensation Recovery Scheme does not apply to post-settlement state benefits and the claimant may choose to defer utilising the benefit of the Motability scheme until after conclusion of the legal claim. This course of action also avoids any potential arguments over the recoverability of the up-front payment. Here, a defendant may seek to argue that the claimant’s up-front payment amounts to a failure to mitigate losses.
There is one further downside to the Motability scheme: freedom of choice. While the choice of cars is extensive, and certainly covers many of the usual vehicles recommended by the occupational therapy independent experts retained by lawyers, it is not comprehensive. The experienced practitioner will recognise the profile of many spinal cord injured claimants: usually young, adventurous and sporty. Those claimants have often been deprived of the opportunity to participate in thrilling or sporty activities and sometimes also the opportunity of self-expression in image.
A claimant with a low level injury may well wish to make up for such losses by driving a high performance sports car. While the cost of such a vehicle may well form a legitimate part of the compensation claim, such cars are unlikely to be available under the Motability scheme. Purchasing a more desirable car (out of an interim payment) may be one option available to the claimant.
However, purchasing a car may not be a viable option for many claimants. While interim payments may be available to some claimants, often there are more pressing financial demands. For other claimants, interim payments may be unavailable, either because liability remains denied throughout (often a feature in clinical negligence cases), or an agreed split in liability may favour the utilisation of the Motability scheme - every case must turn on its own merits. If the Motability scheme is to be utilised, then, crucially, the amount of benefits given up must be added back into the claim to ensure the claimant does not lose out.