05/06/2018
Personal injury lawyers have claimed a victory in their fight against the government’s proposals to raise the limits for claiming compensation on non-fault accidents.
The Justice Select committee has recommended that the small claims limit for personal injuries sustained in road traffic accidents should rise by inflation from £1,000 to £1,500, rather than the £5,000 threshold the government has proposed.
The Ministry of Justice has also come under fire for wanting to raise the limit for Employer Liability and Public Liability claims to £2,000. Instead, the committee has suggested a threshold of £1,500 should be applied.
In it’s 57 page report, the Select Committee also recommended that implementation should be delayed until April 2020, in order to get the technology right, after acknowledging the obstacles facing people who would represent themselves in the current personal injury claims process which would involve use of an electronic platform to handle the pre-action stages of lower-value PI claims.
Although the Committee recognised the need to prevent fraudulent and exaggerated claims, it concluded that the government needs to provide further justification to back up its policy of raising the small claims limit, citing the current proposals as an unacceptable barrier to access to justice.
The report also condemned the proposals as “illogical” to introduce further reforms to the claims process before the government has reviewed the effects of earlier reforms.
Other concerns the committee raised was the Association of British Insurers (ABI’s) data on insurance fraud and the passing on of savings to motor insurance customers. The Committee was sceptical about the savings to motor insurance customers, concluding that the government’s estimate of the pass-through rate “may be over-optimistic, given the lack of robust evidence and the unenforceable nature of insurers’ promises to reduce premiums”.
A delay to rolling out the government’s electronic platform for the pre-action stages of lower-value personal injury claims was also recommended. In addition, the exclusion of employer liability and public liability claims on the new online platform was suggested due to the complexity of such cases.
Justice committee chair, Bob Neill MP said: “Access to justice, including the right of access to the courts, is a cornerstone of the rule of law but these reforms risk putting that right in doubt.
“This is a vitally important point of principle on which the government should reflect. The small claims limit for personal injury should not be increased unless ministers can explain how it will make sure that access to justice is not affected.”
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.