The campaign against blanket increases in the small claims limit for all personal injury claims gained an unexpected ally today. 

Giving evidence to the House of Commons justice committee, Association of British Insurers director James Dalton said the increase to £5,000 should be implemented only for road traffic accident claims at this stage.

The scope of the increase has been a major issue of contention in the debate around PI reforms, with claimant lawyers particularly concerned about the application to employer and public liability claims. The government appears unsure about the scope, saying the limit should apply to all personal injury claims – but referring only to soft-tissue injuries in its consultation on the proposals. 

Dalton said that while rules should change to allow the extension, this should be implemented in relation to RTA cases only. 

‘What you want to see and what consumers need is safeguards and information so consumers understand how to file a claim in this new environment,’ he told MPs.

‘At the moment consumers do not have the information they need to file in the small claims court. We need as a parliament, as an industry and as a sector to provide claimants with the information they need to go through that process.’

The ABI director of general insurance insisted that RTA claims are ‘not that complex at the low end’ and most people would be able to identify who was at fault and if they were injured after an accident. He acknowledged the £180 medical report fee was prohibitive for some claimants and said insurers have pledged to pay that if a claim is filed within a month of an accident.

Dalton was quizzed by MPs on the industry’s promises to pass on savings from any reforms that are introduced. He could not say how many ABI members had actually committed to reducing premiums and admitted the industry had saved ‘hundreds of millions of pounds’ from the reduction in fixed fees in 2013.

He conceded that whiplash claims have come down in the last year and admitted the concern over the faith in medical reports has eased since the introduction of the MedCo scheme.

Neil Sugarman, president of the Association of Personal Injury Lawyers (APIL), appeared alongside Dalton and told the committee the government should be targeting the claims management sector.

Sugarman said claims management companies were ‘unnecessary’ and noted there are ‘far too many people on the periphery of personal injury’.

Commenting on the tariff system for awarding varying damages for soft-tissue injuries, the Bury solicitor said the government risked ‘pigeon-holing’ victims into compensation that was not appropriate for them.

Sugarman said APIL was prepared to accept insurer demands that claims notification forms include a section which would require solicitors to name where the case was referred from.