The Government is proposing significant changes in relation to personal injury claims.
In the first of a series of articles examining the changes, we outline the proposals and concerns about the impact on access to justice these changes may have.
Proposed Changes to the Small Claims Limit
Changes to the Small Claims Track
The small claims track is a Court process currently used for personal injury claims worth under £1,000. The legal costs that can be recovered in these cases are extremely limited.
The Chancellor, George Osborne, wants to raise the small claims track limit to include cases worth up to £5,000. With the limited legal costs recoverable in the small claims track, victims will only be able to claim a small amount of fixed fees to cover their legal costs.
The consequence will be that the majority of victims will be unable to afford legal representation, as it is unlikely that solicitors will be able to act under no win no fee agreements so people would have to pay privately.
Many injured people will have to either represent themselves or may decide not to claim at all, seriously restricting access to justice for thousands of claimants.
Changes to Whiplash Claims
George Osborne has also pledged to scrap general damages for minor soft tissue injuries such as whiplash. This is the compensation paid for pain and suffering and the effect the injury has on the victim.
Osborne wants the proposed reforms to address the ‘compensation culture’ around minor motor accident injuries. However, Government statistics show that there has been a reduction in road traffic claims year on year since 2011/12.
Osborne states that the proposals will remove £1 billion from the cost of providing motor insurance and that he expects the insurance industry to pass on these savings to motorists.
The question is whether this will happen. The Government introduced fixed costs for road traffic claims in 1993, and significantly reduced these costs in 2013 – but do you recall car insurance premiums reducing in those years?
Comment
There is currently very little detailed analysis about these proposals and how they will be implemented. It is not clear whether the increase in the small claims limit for personal injury claims will only apply to road traffic claims, nor is it clear how a typical whiplash injury will be defined.
What is clear is that if these proposals are implemented then there is very real concern about access to justice for many people.
Associate Helen Froggatt specialises in personal injury claims. If you have been involved in an accident, please contact Helen or a member of our team of Personal Injury specialists on 0800 024 1976 or using our online contact form and they will be able to assist.