Ministry of Justice set to impose £5,000 small claims limit

Personal injury lawyers had their worst fears realised last week when the government confirmed it wants to press ahead with the raft of personal injury reforms flagged up in George Osborne’s last autumn statement. The consultation on personal injury, which includes a number of potential changes to the small claims limit and a removal of general damages for soft-tissue injuries, is expected to be published imminently.

In the consultation the Ministry of Justice confirmed it wanted to raise the limit in the small claims court for all personal injury claims from £1,000 to £5,000. It also added that litigants with claims under £5,000 will not normally need to appoint a solicitor to act on their behalf, stating that ‘it is the government’s view low-value RTA related claims are not so complex that claimants routinely require legal representation to pursue them.’ The Law Society response was damning, arguing that the plan would completely undermine the right of ordinary people to receive full and proper compensation, and would simply clog up the courts with litigants in person.

The MoJ consultation also set out the government’s position on George Osborne’s other autumn statement proposal – a ban on general damages for whiplash. It has proposed either scrapping damages entirely, or placing a cap of £425 for ‘minor’ whiplash injuries. Other additional measures added to the consultation include a transparent tariff system of compensation payments for claims with more significant injuries: the options being examined are for different amounts where the injury duration is greater than either six or nine months.

Responding to the MoJ’s proposals, Law Society president, Robert Bourns said:

“[the government’s proposals] will completely undermine the right of ordinary people to receive full and proper compensation from those that have injured them – often seriously – through negligence’. 

‘This five-fold increase [in small claims limit] will stop people getting the legal advice they need in order to bring claims for the compensation they are entitled to in law. People may be tempted to try to bring claims themselves without expert advice.1

‘This will clog up the court system creating a David and Goliath situation where people recovering from their injuries act as litigants in person without legal advice – those defending claims can often afford to pay for legal advice. This undermines ordinary people’s ability to access justice – especially if defendants refuse to accept liability forcing people to fight through the courts without legal help.

‘Spinning this proposal as an attack on the “compensation culture” and claiming it will reduce premiums is misleading. If you are injured through no fault of your own you should be allowed to claim for that,’ he added.

The Law Society has, however, backed the government’s also proposal to ban offers to settle claims without medical evidence, stressing that all claims would need a report from a MedCo-accredited medical expert to receive compensation:

‘This should curtail the practice of some insurers trying to persuade people to settle for less than their claims are worth without evidence of the actual value,’ Mr Bourns said.

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