By Anita Rice


Lord Falconer stunned lawyers last week by unexpectedly announcing that the small claims limit for personal injury cases would remain unchanged.



Spiralling overheads in lower-value personal injury cases have meant costs often exceed damages, putting pressure on the government to reform the system.



But the Department for Constitutional Affairs' long-awaited consultation paper on case track limits and the claims process for personal injury claims focuses instead on streamlining the way cases are handled.



Speaking at the Association of Personal Injury Lawyers' (APIL) annual conference last week, Lord Falconer said: 'Raising the limit to £5,000 or £2,500 [from £1,000] would take the majority of claims out of the fast track and into the small claims track. It would solve the problem of high costs at a stroke. But it would solve it at the cost of denying a great number of people access to legal representation.'



He added: 'The proposed new process is built around... promoting early admissions of liability and early settlements, and removing duplication of work from the process. It provides for actions to be taken within set time periods and with fixed recoverable costs.'



The paper also proposes lifting the fast track limit for all civil cases to £25,000 but leaving the general small claims limit unchanged at £5,000.



Martin Bare, APIL's new president, said he was pleased to note Lord Falconer's 'clear recognition' that changes in behaviour, such as unnecessary denials of liability, are essential. However, he cautioned 'the devil is always in the detail'.



Tony Goff, chairman of the Motor Accident Solicitors Society, warned fixed recoverable costs must be set at a 'sustainable level'.



Henry Bermingham, vice-president of the Forum of Insurance Lawyers, highlighted fixed fees and response time-limits as areas for concern. 'The proposal envisages insurers will respond on liability within 15 days in road traffic accident cases and within 30 days on employer and public liability ones. The time-limits are too short and not practical in the real world,' he said.



The Association of British Insurers, which had called for the small claims limit for personal injury cases to be raised to £5,000, said it welcomed both the government's recognition that reform was necessary and its decision to raise the fast track limit.



Law Society chief executive Desmond Hudson praised the government's proposals as a 'triumph of common sense' and called on solicitors to 'respond to this consultation to support the retention of the existing limit'.