Personal Injury Reform Update

The Government has decided to press ahead with most of its proposals .

As a result the Small Claims Limit for motoring cases has been increased to £5000 depriving motorists and their passengers of legal advice in claims under this limit .

The National Law Society responded as follows :

A Law Society spokesperson said: “These changes will deprive motorists and their passengers from being able to recover the cost of essential legal advice for any injuries worth £5,000 and under when a negligent driver crashes into their car.

“While we are glad that the MoJ has listened to some of our concerns, and has decided to restrict the increase in the small claims limit to £2,000 for personal injury cases other than road traffic claims, we cannot accept that a £5,000 limit for motoring claims is reasonable.

“The government is treating injuries that would be regarded as grievous bodily harm in the criminal courts as small claims. A limit of £5,000 will mean injuries including facial scarring, fractured ribs, a bruised chest and whiplash to the neck would be considered as ‘small claims’. This means people will be forced to bring claims themselves without expert legal advice.

“The MoJ does not appear to have properly considered the fact that this will clog up the court system creating a David and Goliath situation where people recovering from their injuries, deprived of legal advice, have no choice but to act for themselves.

“Those defending claims meanwhile are likely to be able to pay for legal advice. The increase in the number of litigants in person that will result from these changes will have serious consequences for the courts.

“The narrative accompanying these proposals has always sought to make the link with stopping fraudulent claims. But these proposals are not, as repeatedly stated, about that at all. Fraudulent claims are repellent but they should be dealt with by targeting the fraudsters – not the vast majority of honest claimants who have been injured and bring genuine claims.”

The Law Society has long campaigned for some of the changes now proposed in this bill. For example, ditching the practice of insurers offering compensation for whiplash ahead of any medical assessment is to be welcomed, but we believe this should be extended to all claims.

“We are utterly sceptical of the notion that off the back of these changes motorists will have their insurance premiums cut as the insurance industry has significant form in falling short when it comes to passing savings to its customers.”

The Association of British Insurers (ABI) conceded to the Commons Justice Select Committee during a session on personal injury reform that the insurance industry saved ‘hundreds of millions of pounds’ from reforms to personal injury in 2013 and that the number of whiplash claims have come down in the last year.

The findings of an economic study by Compass Lexecon* also show that gains from the government plans will boost insurers’ profits. At the same time the plans would curtail the number of people who can claim for soft tissue injury caused through no fault of their own.

*The study by Compass Lexecon focused on the government’s impact assessment of proposed changes to the soft tissue injury claims process and an increase in the small claims court limit.

It was commissioned by the Law Society, the Association of Personal Injury Lawyers (APIL), the National Association of Motor Accident Solicitors (MASS) and carried out by economists at Compass Lexecon.