MoJ undecided on scope of small-claims limit increase
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.
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.’