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No change to small claims limit, but for how long?

Chris Grayling

The news that the personal injury industry was hoping and waiting for was announced yesterday as Justice Secretary, Chris Grayling (pictured) confirmed that the small claims limit will not be increased.

The decision to listen and go with the advice of the House of Commons Transport Select Committee is a major breakthrough for the personal injury sector with a government who seemed hell bent on strangling the life out of the claims process and in turn the accident victims access to justice.

However ‘failing Grayling’ has left the industry will a little insecurity over the claim limits future by refusing to rule out an increase in the future as he claimed there were still good arguments for an increase to the limit, currently set and staying at £1,000, to £5,000 in order to encourage insurers to challenge suspect claims.

But he also added: “At the same time, we have listened to the views of the transport committee and others that now may not be the right time to raise the small claims limit because of the risks that it may deter access to justice for the genuinely injured and encourage the growth of those disreputable claims firms which so damage the industry.

“At this stage, we have decided to deter any increase in the small claims track until we can determine the impact of our wider reforms on motor insurance premiums and better safeguard against risks.”

There was further encouraging news for the personal injury sector as Chris Grayling targeted the insurance industry for criticism and urged them to bring an end to the practice of making offers to settle claims without requiring medical evidence and asked them to share more of their data on fraudulent and exaggerated claims with claimant lawyers to help tackle the problem better.

MASS (Motor Accident Solicitors Society) received the news well with Chair, Craig Budsworth saying: “Our members will today be breathing a huge sigh of relief. The government has pulled back from the brink of denying thousands of legitimate claimants’ access to legal advice. If the insurance industry con had succeeded, they would have been able to hoodwink countless individuals in the small claims court.

“All sides must now work together to address the serious problem of fraud and exaggeration in claims, finding workable solutions that are proportionate, balanced between the interests of the claimants and defendants and favourable to all those who pay motor insurance.”

MASS has also welcomed the government’s decision to tackle early settlement offers being made by insurers without the client undergoing any medical examinations, which they described in a statement as a “disgraceful practice”.

The not for profit industry representative body has long campaigned for this practice to be brought to an end and see the Ministry of Justice’s recommendation to the insurers as a culmination of their campaign which has run since the inception of MASS in 1991.

All eyes will not turn to the insurance industry and whether or not they will keep to their word and significantly reduce insurance premiums. It was revealed according to the confused.com pricing index that the average comprehensive premium had fallen since the introduction of LASPO but so far it only constitutes to around the 3-4% mark in most cases, which many will see as not significant enough considering the reforms that they have forced through to the industry.

Image source(s)

1. Wikipedia; Government; https://commons.wikimedia.org/wiki/File:Chris_Grayling_2016.jpg

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