The Transport Select Committee has warned the government against increasing the small claims limit for personal injury and warned the insurance industry to ‘put their house in order’ immediately following the report from their whiplash inquiry.
The MPs on the committee accused the motor insurance industry of encouraging fraud and exaggeration in accident claims and refused to verify the claim by the ministry of justice that the UK was ‘the whiplash capital of the world’.
Among the circumstances which the committee listed in their findings, a lack of authoritative data on the scale of exaggerated or fraudulent claims were on the list and there was criticism of the government as well for bringing forward reforms to the industry without producing giving ‘even an estimate of the comparative scale of the problem’.
Highlighting their reasons for not supporting the increase in the small claims limit the committee said in their report: “We believe that access to justice is likely to be impaired, particularly for people who do not feel confident to represent themselves in what will seem to some to be a complex and intimidating process. Insurers will use legal professionals to contest claims, which will add to this problem.
“It would be financially difficult for many solicitors to assist litigants fighting personal injury claims using the small claims procedure, given the limited fees available. However, we are concerned that some claims management firms might find a way to enter the process, fueling another boom in their activities.”
The release of the committee’s findings was well received by the personal injury sector who have spent the last year or so campaigning against all types of hard hitting reform within the industry.
Chief Executive of the Association of Personal Injury Lawyers (APIL), Deborah Evans, said: “Finally, some realities about the whiplash claims systems have been recognised. The select committee has acknowledged that the government has, so far, largely been influenced by the insurance industry in its plans to tackle high motor premiums, and called for insurers to get their house in order. I couldn’t agree more.”
The chairman of the Motor Accident Solicitors Society (MASS), Craig Budsworth supported her sentiments saying: “The amount and extent of legal reform has already had a major impact on the balance between defendants and claimants and it’s reassuring to read that the committee has concluded the small claims limit should not be raised until the wider impact is better understood…
“We now hope that ministers listen to parliament and accept the committee’s recommendations.”
Of course that is now the next concern for the personal injury sector as the government have ignored recommendations from reports before, most notably from their own advisor Neil Fenn, whose report warned against extending the portal, which is launched today.
But in this case there is more hope that this will now put a stop to the proposals, especially as the Justice Minister Helen Grant announced that the government had delayed their decision to wait for the findings of the TSCs whiplash inquiry. Only time will tell.
To see the full findings of the report click here.
1. Wikipedia; Narratographer; https://commons.wikimedia.org/wiki/File:Houses_of_Parliament_(6803079953).jpg