Government set to increase small claims limit

26/07/2017

The Government has announced it is pressing ahead with plans to increase the small claims limit for personal injuries in road traffic accidents. It intends to raise the threshold for claiming compensation from £1,000 to £5,000 in an attempt to “crack down on the compensation culture epidemic”.

The new provisions are being tabled under the Prisons and Courts Bill and if it’s passed, it could become law as soon as October. Many personal injury solicitors, however, are opposed to the move, which they believe will adversely affect innocent victims of road traffic accidents as they will be liable for their own legal fees if they pursue a claim for compensation below the new limit.

The proposal will be brought in along with other measures designed to reduce compensation pay outs. These include introducing fixed tariff caps which will see a significant reduction in the amount of compensation paid out to whiplash victims. For example, whiplash injuries lasting up to three months will decrease from around £1,600 to £225. The cuts continue for injuries lasting six months – down from around £2,250 to £450 – and just £765 for people suffering with injuries lasting up to nine months.

The Ministry of Justice claims that by making these changes average insurance premiums will fall by around £35.00 per year, although many personal injury lawyers state that insurance companies profits are continuing to grow and the savings from this latest round of legislation won’t be passed on to motorists.