No one in government remembers the last time a lord chancellor introduced something as short-sighted as these personal injury reforms.
You might have thought that announcing a fundamental change in the law of tort – and not just one that affects combat troops – would have attracted some public attention. At the moment, the law will normally try to compensate someone who is injured through another person’s negligence. But not for much longer, unless the government backs down.
If a negligent driver crashes into your car – leaving you with cuts to your face, bruises on your chest and a whiplash injury in your neck – you soon won’t be able to claim restitution for your pain, suffering and loss of amenity (known as PSLA). Under plans outlined by the Ministry of Justice last November, people who have suffered ‘minor’ soft-tissue injuries in road traffic accidents will receive either nothing at all for their PSLA or £400 – less than a quarter of the current average compensation payment – plus an extra £25 for psychological damage.
What justification can there be for this inroad into long-established common law principles? The government says a ‘compensation culture has grown up around whiplash claims… which encourages motorists to make claims when little or no injury has been suffered’. It believes its proposals will reduce the annual cost of motor insurance premiums by an average of £40.
If no injury has been suffered, a claim for compensation will be fraudulent and should be penalised. If the injury is small, then the damages should be too. But why absolve drivers and their insurers from the consequences of careless driving? You might as well stop people suing local councils that fail to repair dangerous footpaths or employers who ignore hazards in the workplace.
Actually, the government is planning to do that too. The small claims limit for all personal injury cases is to be increased to £5,000. So long as the claim for PSLA is less than that figure, a negligent defendant will no longer be ordered to pay the injured claimant’s legal costs. That means claimants won’t find solicitors to represent them. Some claimants will become litigants in person. Others won’t bother and hazards will remain in place.
Because collective memory at the Ministry of Justice goes back no further than last summer, it is not surprising that nobody in government remembers the last time a lord chancellor introduced something as short-sighted as this. Nearly 17 years ago, legal aid was abolished for most personal injury claims by the inappropriately named Access to Justice Act 1999. Though ministers said it was too expensive, legal aid was designed to ensure that the costs of bringing a claim would be met by defendants and their insurers rather than by taxpayers. Replacing legal aid with conditional fees led to unwelcome claims farmers, excessive success fees and unnecessary insurance premiums. As so often, the reforms simply shifted costs elsewhere.
This time, though, the judges have spoken out. A team of four headed by Lord Justice Briggs, the deputy head of civil justice, reported their ‘dismay that a proposal with such serious potential implications for the management and delivery of civil justice’ had not been discussed with the judiciary before being launched as a public consultation. Only six weeks had been allowed for responses and that included the Christmas period.
As the judges explained, the courts’ workload would double, treble or even quadruple at a time when they were already under pressure. That’s because personal injury cases where the sum claimed for PSLA is between £1,000 and £25,000 are currently allocated to what’s called the fast track. These cases are conducted between
claimants’ lawyers and insurance companies with a very high degree of efficiency. Most cases settle, Briggs and his colleagues told the Ministry of Justice. Disputes over quantum take 15 or 30 minutes to decide (including an extempore judgment). Disputes over liability are tried in a day or less.
A few of these cases would remain in the fast track. But most of those sent down to the small claims track would now be brought by litigants in person, with fewer settlements, longer hearings and greater need for appeals.
Consumers have little sympathy for claimant lawyers until they become claimants themselves. But putting lawyers out of business – which is what the government proposals will do – has much broader economic implications. Research commissioned by the campaign group Access to Justice suggests that firms at high risk of losing personal injury work support 66,000 jobs in the wider economy.
The insurance industry has told ministers that these reforms will save it £1bn a year. However, research commissioned by the Law Society, the Association of Personal Injury Lawyers and the Motor Accident Solicitors Society suggests that these savings will not be passed on to motorists.
What drivers will be given if these changes go through is a licence to be careless. Has the government forgotten that it owes all of us a duty of care?