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Small claims limit increase set to deny millions access to justice

Proposed reforms to increase small claims limit and ban whiplash claims will see thousands of injury victims go without vital compensation.

Government propose to increase small claims limit

The Government’s announcement last week that they propose to raise the small claims limit from £1,000 to £5,0000 and do away with damages for so called ‘minor’ whiplash injuries, is set to leave more than 60 million UK citizens without representation in the small claims court should the need to make a claim for a personal injury.

Last week’s announcement, if passed through parliament, will mean that genuine personal injury victims will be left exposed to unscrupulous claims management companies who will fill the void left by bona fide law firms who would have been forced to leave the industry.

A public consultation period will now begin, where all sides will be able to put forward evidence for and against the proposed reforms. The reforms have been proposed as part of the Government’s commitment to tackle fraudulent claims within the personal injury profession and they insist that all savings made by insurance companies following their introduction will be shared with the British public in the guise of savings on their motor insurance premiums.

However, the same promise was made prior to the introduction of the last major reforms to be introduced to the profession in 2013 and despite figures released by the Association of British Insurers (ABI) themselves,  showing a decrease in claim costs for five consecutive years,  this promise has been broken.

David Byrne discusses the proposals to increase the small claims limit

Scott Rees & Co Partner, David Byrne

Scott Rees & Co Partner, David Byrne, has labelled the Government’s proposals as ‘outrageous’ and insists that it is important that the general public realise that should they be introduced, they will take away the rights of the genuinely injured.

“Since 2010, the value of personal injury claims has fallen by 30% and the insurers have enjoyed an £8.73 billion windfall in the process. Ask yourself, in the last six years has your premium decreased without you having to shop around to change providers?”

What the Government’s latest  proposals  mean is that in the event that you should suffer an  injury whether in a car, at work or in the street that is deemed to be lower  than the value of £5,000, you will effectively have to take on the claim yourself without legal representation.

To put this into perspective, you could foreseeably be involved in an accident at work where you suffer a painful back injury that leaves you debilitated and in need of months/years worth of rehabilitation to recover. As a result you will more than likely be unable to work during this time and in some cases it could even force you to seek new employment. Yet despite all of this, you will not be able to receive legal representation from a qualified professional, as your claim is valued at less that £5,000.

Therefore, to pursue your claim, you will be required to attend court as a litigant in person, without representation,  and take on the person at fault’s insurance lawyer. How is that a fair scenario?

The promise of savings on insurance premiums is a nice sounding one in theory, but it has been made before following the LASPO reforms in 2013. Since then we have seen a year-on-year decrease on the value of claims, yet how many people can genuinely say they have seen any savings on their insurance premiums in that time?

These reforms only benefit the insurers who have lobbied hard and negotiated with the Government into getting them introduced. Is it a coincidence the announcement is made totally out of the blue less than a week before “The Autumn Statement “ when the government announces an increase to 12% tax on insurance premiums. What they allege to give back to the consumer by way of a £40 reduction in premiums  the government takes away.

The Minister for Justice is being exposed as completely out of her depth on this matter and has bought into the insurance propaganda regarding  a so called whiplash epidemic that the insurers’ own figures don’t support.

The personal injury profession accept that the current system is flawed. That is why dialogue between the Solicitors Profession and the ABI is required to reach an agreement on improvements.

We are in agreement on banning Pre med offers and putting an end to cold calling. Not to mention an improvement on the MEDCO system which decides which medical experts are used for a claim and better way to assess the work they are doing.

These changes are much fairer on all parties involved. It will mean that genuine victims still receive representation in the small claims court. Motor insurance premiums should still decrease due to savings made on the continuing  reduction of claim costs,  and unscrupulous CMCs will be discouraged from operating within the industry altogether

The alternative doesn’t bear thinking about and would be to the detriment of 60 million UK citizens. Genuine victims will be forced to go without adequate compensation; thousands of professional jobs will perish, the NHS will no longer be able to recover the costs of any treatment given to victims from at-fault insurers, therefore costing it an estimated £9 million a year and HM Revenue and Customs will also experience losses of an estimated £65 million a year in VAT and insurance premium tax.

The only ones who will gain anything from these cuts will be the insurers, who will continue to add to their healthy windfalls from the past three years. Any assurances given by the government in regards to insurance premium savings can be taken with a pinch of salt, as out of the hundreds of insurers  operating in the UK only two have confirmed that they will actually pass on all savings to their customers and the Government have assumed that they only pass 85% on as part of their impact report.”

So what can be done to stop these reforms and protect your right to access to justice? The Access to Justice (A2J) group are urging people to write to their local MPs about the matter. To find out who your local MP is simply visit http://www.parliament.uk/mps-lords-and-offices/mps/ and type in your Postcode.

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