MoJ undecided on scope of small-claims limit increase

Topics: Costs, fees and funding,Personal injury & clinical negligence

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Ministry of Justice officials have told lawyers they have yet to decide on the scope of the rise in the small-claims limit – but there appears little inclination to water down plans to remove whiplash compensation.

Ministers are said to be convinced that low-value injury cases should be ‘easy enough’ to be done without legal representation.

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Chancellor George Osborne proposed in November that the small claims limit should rise for personal injury claims from £1,000 to £5,000 – effectively removing lawyers from the process altogether.

But the policy was packaged on the basis that motor insurance premiums would come down, as insurers would pass on savings on legal costs, suggesting just RTA claims may be affected.

In a meeting between the MoJ and the Association of Personal Injury Lawyers, the transcript of which was sent to APIL members yesterday, it was revealed ministers ’haven’t yet made the decision’ on whether the £5,000 limit will apply to all PI claims.

This will be subject to a consultation likely to be published in the coming weeks, which will also consider a proposal to scrap general damages for ‘minor’ soft-tissue injuries.

The MoJ revealed it is considered a shorter consultation period as these are ‘not new questions’ and most organisations already know what they have to say and have the relevant data to hand.

Officials said they will commit to safeguards for claimants before any increase in the small-claims limit, with an announcement on this ‘in due course’.

They made clear that work is being carried out to ensure claims management companies do not move into any space vacated by lawyers, with a report on CMC regulation due out in March or April.

They will also consider the likelihood of more litigants in person taking up more court time, but the MoJ said many claims are unlikely to run at all if the right to claim compensation for minor whiplash is removed.

LiPs will be able to use the portal for small claims, although it was acknowledged volumes of cases in the portal are likely to reduce.

The MoJ, which last month received assurances from the insurance industry that 100% of savings would be passed onto consumers, said it used ‘industry sources’ and government data to find figures for fraud, although these may still be revised.

The MedCo scheme, which demands that all medical experts are accredited and independent of solicitors instructing them, will still be needed after the reforms, with an update on a pre-Christmas consultation on MedCo due out shortly.

It was also revealed that the consultation on personal injury will likely be published at the same time as one on the introduction of fixed fees for clinical negligence cases. The MoJ will also revisit the issue of damages based agreements in the coming months.

The MoJ responses will give little optimism to claimant lawyers who are planning to oppose Osborne’s proposed changes.

APIL president Jonathan Wheeler (pictured) said it is ‘unconscionable’ to remove compensation from certain types of claim.

‘To do both that, and then make it really difficult for others to proceed without even analysing the impact of previous reforms, is completely irresponsible,’ he said.

‘We have always understood the need to reduce costs and have tried to work with the government to improve the legal process but to single out a group of claimants like this and withdraw their long-held right to compensation really is crossing the line.’

Readers' comments (39)

  • It is abundantly clear from the moj responses to the well crafted apil questions that they were absolutely clueless about the reforms and had no handle on the consequences. My gut instinct is that the moj are as taken a back by the chancellor's announcement as apil, foil and everyone else involved in pi work were.

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  • I applaud the government’s approach
    Whiplash claims are the problem and moving them to the Small Claims Court will help. They are easy and the genuine claimants will find no problems in pursuing a claim in the small claims court.
    I don’t think other PI claims are a problem and could be difficult for the litigant in person
    Good to see the Government will consider acting against Claims Management Companies.
    I doubt APIL or the Law Society have any weight with this government given their record.

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  • Anon 05:42pm - Your comment is utterly stupid and it is obvious that you are not a solicitor. Firstly, there is no such thing as the Small Claims Court; the Small Claims Track is a case management track of the County Court. Further, they intend to ban whiplash claims not move them to the Small Claims Track. This is a publication for solicitors and other suitably qualified individuals not trolls with no understanding of the issues under consideration.

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  • I am a Claimant personal injury lawyer. I invite anyone in support of the rise of the SCL to £5000 to sit in a car and be voluntarily rear-ended and see what it feels like. It is not nice. How is a lay person going to understand what their potential level of damages is? I have seen many a claim increase from low value to high value. Professional negligence claims will increase. Perhaps the way to deal with it is to allow an initial fixed consultation fee with a qualified lawyer for preliminary advice to be reviewed 12 months post accident if symptoms do not improve and then at least there is some level of protection.

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  • I am going to start specialising in professional negligence claims!

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  • 'They will also consider the likelihood of more litigants in person taking up more court time, but the MoJ said many claims are unlikely to run at all if the right to claim compensation for minor whiplash is removed.'


    There!! FINALLY we have some TRUTH for the REASONS behind their antics

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  • Annon @5.42... As you are obviously an insurer so please only use this website and comments board if you have something sensible to say and your comments are factually correct.

    Otherwise you are making yourself look very stupid

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  • Another justification for the increase is because it has not been increased for years. But neither has the guideline rates. On the back of that justification, guideline rates should increase 400%...that is not going to happen.

    Further, the MOJ's response shows that they are making it up as they go along. The Government sees law and lawyers as an easy way of saving money but in reality, they are costing themselves a lot more. Courts will be clogged up as they have made the process so technical, even lawyers find it difficult to navigate.

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  • So let's say a young girl, aged 10, is hit by a drunk driver. She is in agonizing pain for 18 months with her neck and back-all accident related.

    Under this Government she is no longer entitled to be compensated for her pain and suffering caused by the drunk driver? How can that be legal, let alone moral.

    What about a police officer that is injured in a car chase after criminals? The officer could have mental injuries and severe neck pain for 12 months. Again no right to compensation for all that pain and suffering.

    What about the elderly lady of 73 years of age knocked down in the street by a reckless 18 year old driver. As a result of the accident she is in agonizing pain for 12 months and can no longer leave her house. Again, under your new wonderful government she has no right to compensation for all that suffering.

    The daily mirror should be bloody well ashamed of itself promoting these reforms as good for the people of England.

    The analysis here is a £40 insurance saving (which will never materialize) as justification for these reforms is pathetic. The average motorist will have an RTA every 5 or so years and is likely to be injured so losing the right to general damages is in nobody's interest. If the general public truly knew what the stood to lose ( the peace of mind to know if they are, god forbid, injured for up to 2 years in an accident they can access legal representation and be compensated for their pain and suffering, would a single person vote for these reforms?
    Contrary to Government thinking please can everyone apply some common sense and acknowledge that being in a road traffic accident isn't akin to the bumper cars- it's often a very frightening and painful ordeal for all involved ). It does not make the injured person ''irresponsible '' for then looking to be compensated for that pain and suffering caused through the negligence of another- that is the legitimate thing to do! It is not a ''compensation culture''- it is people who have been harmed through no fault of their own seeking to be put back into the position they were in before the accident.

    The further analysis is if teh entire system as it presently stands ONLY adds £40 to the average motor insurance policy then surely it's a system worth keeping.

    All MPs are subject to a code of conduct to the effect that when they have a declared financial interest in something ( 40 Conservative MPs includung Osborne and Cameron have declared interests in Insurance ) then whenever there is a potential conflict of that interest they are duty bound to always act so as not to cause detriment to society. Need I say more to all you lawyers out there as to the correct approach to maximize pressure?

    I also understand that the Insurance Force Task Force reported against raising the SCL to 5k. No surprises its publication was delayed.

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  • It's very easy to give isolated examples of individual situations where the increase in SCT limit will be result in some unfairness. However, in reality, those cases are probably less than 1% of the total. The change is targeting the 99% of straightforward whiplash claims. As with all law changes, it's about weighting up pros and cons. I think the vast majority of the public view minor whiplash claims negatively. Just read any non-legal blog or forum.

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