The government has said it is both ‘justifiable and proportionate’ to increase the personal injury small claims limit to £5,000.
In an official response to an online petition, triggered when the number of signatures passed 10,000, the government said the limit has remained at £1,000 for nearly 25 years.
Chancellor George Osborne (pictured) announced the proposed increase, along with a ban on damages for ‘minor’ whiplash injuries, in his spending review last month. It is likely both will come into force in April 2017, subject to parliamentary scrutiny.
A petition in protest has now passed 21,000 signatures as the personal injury sector starts to campaign against the changes.
The government’s response said most minor injury cases are ‘straightforward enough to be brought without the need for legal representation’, making them suitable for consideration in the small claims track.
‘Claimants are not precluded from engaging legal representation, but the small claims track is intended for cases which could be brought without lawyers,’ said the response. ‘However, the £1,000 limit for personal injury cases in the small claims track was set in 1991 and has not been changed for nearly 25 years, so a revision is long overdue.’
As background, the response said the number of reported road traffic accidents has fallen from around 190,000 in 2006 to 146,000 in 2014, while the number of RTA injury claims has risen from 520,000 in 2006/07 to 760,000 in 2014/15.
The government plans to consult on the detail of the small claims limit rise - including whether it should include all personal injury claims - in the new year. The consultation will include what safeguards are necessary and will be published alongside a detailed impact assessment.
The consultation will also include the question of whether to 'remove general damages for low-level whiplash claims'.
The government response stressed that people who suffer serious injuries will continue to be entitled to compensation.
It added: ‘These reforms will end the cycle in which innocent car owners pay higher premiums to cover false or unnecessary claims by others and the government expects insurers to pass savings of £40-£50 per average motor insurance policy on to consumers.
‘Two companies have already said publicly that they will pass all the savings back to consumers.’
The response said the overall costs of false or unnecessary PI claims ‘far outweigh’ the value to genuine claimants of ‘relatively small’ amounts of compensation.