The government’s proposals to increase the small claims limit for personal injury from £1,000 to £5,000 have been strongly criticised by claimant’s groups and by the Law Society of England and Wales.
Under the proposals, people who are injured would not be able to claim back any legal costs if they make a claim for compensation, where the compensation claimed is less than £5,000.
Robert Bourns, President of the Law Society, said “These 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”
He explained that the change “will stop people getting the legal advice they need, in order to bring claims for the compensation they are entitled to in law”
If the changes are made ,they are likely to mean that many people will feel unable to pursue legitimate claims, allowing those who injure others to escape the consequences of their actions. Those who do persevere, and who try to recover the compensation they are due, are more likely to have to do so without legal advice. There will be no bar on defendants (usually insurance companies) using legal experts, creating an unbalanced and potentially very unfair situation. The lack of access to legal advice and representation is also likely to lead to longer delays in court as cases where one party is representing themselves tend to take more time, and more involvement from a judge, than those where both parties have the benefit of proper advice.
The government, backed by insurance companies has tried to spin the changes as an attack on the 'compensation culture', and have claimed that it will reduce premiums, however, this is misleading, as it fails to acknowledge that any savings will be made by limiting the ability of victims to recover the full compensation they are due.
Many road traffic incidents involve injuries which result in victims claiming less than £5,000 for their injuries, so the changes would mean that many of those hurt in non-life-threatening accidents would be affected.
Ben Whelan, Head of FDC Law’s Litigation team, explains “
Although damages for relatively minor injuries are often below £5,000, the legal process needed to claim them is not always straightforward, and as much work may be needed to claim £3,000 as for a claim involving a higher amount. Insurance companies often offer much less than the victim is entitled to, and it would be difficult for a lay person, without access to proper advice, to be able to judge whether any offer is appropriate, or to dispute the insurers often one-sided or incomplete view of a case. Proper advice is essential to ensure that victims are able to claim what they are entitled to, following an injury caused by someone else’s negligence”
In addition, while some insurers have claimed that they would pass on any savings to policy-holders in the form of lower premiums, there is nothing in the proposals which would require this or enable it to be enforced.
The government has, however, recognised that it is not appropriate to allow insurers to seek to settle cases without getting appropriate medical evidence.
Law Society President Robert Bourns again:: “We do, however, support the proposal to prevent claims being settled without medical evidence. 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.”
The government’s consultation period continues until January 2017
