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Yes, it might work with the straight forward rear enders where liability is admitted, but what about every other scenario?

If the insurance company deny liability (for any reason) the claimant will have to stump up the costs of rehab, medical reports and issue fees (which could easily hit £500) with only the possibility of getting it back . This is all for the chance to get damages of £700? Even us litigators probably wouldn't risk it.

I've said it on here before but you can't have a half way house. You either have a complete non fault compensation like Aus and NZ or keep equality of arms.