Often, after an accident, the injured person will receive state benefits as a consequence of the injuries sustained. The Compensation Recovery Unit (CRU) is a body set up in order to recoup those benefits on the state’s behalf.
Before making any compensation payment, the Defendant (usually his insurers) has a duty to apply for a certificate of recoverable benefit (“CRU certificate”) and (subject to a right of appeal that both parties have) is required to repay to the CRU the benefits shown on that certificate within 14 days of making the compensation payment.
However, the Defendant is then entitled to deduct from certain parts of the damages paid, any deductible benefits that have accrued up to the date of the final compensation payment or, in rarer cases where the payment is made more than 5 years after the accident (or in disease cases more than 5 years from when the Claimant began to claim the benefit), up to that 5 year cut off date.
The claim for pain, suffering and loss of amenity is “ring fenced” and no deduction can be made as against this.
Other benefits can be deducted against the following heads of claim as follows:
Loss of earnings
- Disability working allowance
- Disability pension1
- Incapacity benefit
- Income support
- Invalidity pension and allowance
- Jobseeker’s allowance
- Severe disablement allowance
- Sickness benefit
- Statutory sick pay2
- Unemployability supplement
- Unemployment benefit
- Attendance allowance
- Care component of DLA
- Disablement pension increase3
Loss of mobility
- Mobility allowance
- Mobility component of DLA
1 Payable under Section 103 of the Social Security Contributions and Benefits Act 1992
2 Rarely relevant now as it does not include payments on or after 6 April 1994
3 Payable under Sections 104 or 105 of the Social Security Contributions and Benefits Act 1992
An example may assist.
A Claimant receives damages of £10,000 broken down as follows:-
- Pain, suffering and loss of amenity – £5,000
- Loss of earnings – £3,000
- Costs of care – £2,000.
The CRU certificate lists benefits totalling £7,000 and broken down as follows:-
- Incapacity benefit £3,500
- Attendance allowance – £1,500
- Mobility allowance – £1,000
- Mobility component of DLA – £1,000.
The Defendant must repay £7,000 to the CRU.
However, the Defendant is not entitled to deduct all of this from the £10,000 compensation and simply pay the Claimant £3,000.
The Defendant can only deduct “like for like” benefits.
In the above example the £5,000 for pain, suffering and loss of amenity cannot be touched. The loss of earnings claim is completely extinguished by the Incapacity benefit.
The compensator can deduct the £1,500 attendance allowance from the care claim (with the remaining £500 going to the Claimant).
However there is no claim for “like” damages against which the compensator can deduct the mobility allowance or the mobility component of DLA. The injured Claimant therefore actually now receives £5,500, but the Defendant has to pay (in total) £12,500.
The theory behind the recoupment is that the state should recoup from the Defendant benefits paid to the Claimant when such benefits were paid as a result of the Defendant’s negligence. The Claimant should not end up out of pocket, as all that is being deducted are benefits that have already been paid. However, it is important to check the CRU certificate carefully and to inform your solicitor immediately if you disagree with the benefits and/or figures listed.