Restricting your Access to Justice?
The Ministry of Justice (MoJ) has announced the small claims limit will be increased to £5,000 for whiplash claims and £2,000 for other personal injury claims including employers’ liability and public liability claims.
As part of the Prisons and Courts Bill, the MoJ intends to set up a tariff based systems for whiplash claims, replacing the Judicial College Guidelines.
Compensation available under the proposed tariff ranges from £225.00 for whiplash injury lasting 0 to 3 months, up to £3,725.00 for injuries lasting 19 to 24 months.
The rise in the small claims limit will materially alter the motor claims market by removing legal costs recoverable for such claims. If injuries fall within the Small Claims Limit, a Claimant has to bear his/her own legal costs. Even expenses such as medical reports may not be recoverable under the new regime.
It is unlikely that Claimants are going to be able to get the legal representation they require in such claims which in turn restricts access to justice for those injured through no fault of their own.
Claimants will now find themselves having to submit claims, instruct their own medical experts, interpret the medical reports and negotiate compensation against legally backed insurance companies.
The Association of British Insurers were pushing for the reforms based on a perceived “compensation culture” fuelled by exaggerated and fraudulent claims despite the Government revealing that whiplash figures were actually falling.
Louise Ellman, chair of the House of Commons transport select committee wrote to the Justice Minister in January publicly doubting whether the Government’s personal injury reforms will do anything to combat fraud. ‘[The reforms] could help to depress the number of claims overall but are not specifically targeted at fraudulent claims,’ she said. The government should look to reduce fraudulent rehabilitation claims or fraud in repairs or credit hire.
She shares our concerns at Cromptons Solicitors in that managing a claim worth up to £5,000 could be a ‘daunting prospect’ for many motorists, who may fall victim to ‘unscrupulous’ claims management companies.
The MoJ advises it expects motor insurance premiums to be cut by around £40 per annum as a result of the reforms.
The Association of Personal Injury Lawyers (APIL) said the proposals are based on a flawed premise, backed up by scant evidence and will do little to counter what fraud there is in the claims process. It is also doubtful of insurers’ pledges to pass on to consumers any savings they make.
The tariff system and the ban will require primary legislation and will form part of the Prisons and Courts Bill and could be introduced as soon as October 2018.