Smith-Jones

Small Claims Limit Increase

Once upon a time there was Legal Aid to enable injured people to access legal representation, this was replaced by the “No Win No Fee Agreement”, now in April 2020 a new chapter is looming. Could this affect you?

 

Introduction

A ‘small claim’ is any property claim worth less than £10,000 or any personal injury claim valued at less than £1,000. But that may be about to change…

In November 2016, the Government announced plans to increase the small claims limit for personal injury claims, meaning that personal injury claims will have to be of a higher value to be pursued through a personal injury solicitor. This article will talk about the proposed changes to the small claims limit, who they will affect the most and how it will affect them.

 

What is the current system?

Currently, any property claim that is worth less than £10,000 or any personal injury claim valued at less than £1,000, is regarded by the court as a small claim, and as such is expected to be brought in the Small Claims Court.

On the other hand, personal injury claims worth over £1,000 in value can be pursued through the Government electronic portal or through the County Court. In pursuing a claim worth over £1,000, claimants are able to claim back a portion of the cost of legal representation from the other party to the claim. However, the idea behind the Small Claims Court is that claimants will not need legal representation, and so they are not able to have their legal costs paid by the other side.

 

How are injuries valued?

As you may expect, it is not easy to place a value on an injury, as different injuries can affect people in different ways. So, insurers and solicitors rely on medical evidence drafted by an expert, along with guidelines issued by the Judicial College[1] and rulings made in previous cases in order to make a valuation of any injuries.

The guidelines, coupled with decisions made in similar cases, can provide a ball park figure of what an injury is worth. For more information about the value of a claim, visit our claims calculator here: https://smithjonessolicitors.co.uk/claims-calculator/

 

Changes to the Small Claims Limit

In November 2016, the Government announced plans to enact legislation that would, amongst other things, increase the small claims limit for personal injury claims arising out of a road traffic accident to £5,000.  For all other personal injury claims, the limit will be increased to £2,000. These changes will be in effect from April 2020.[2]

The primary aim of these changes is to reduce the number of claims being made fraudulently, mainly whiplash claims. According to Lord Keen at the recent report stage in the House of Lords, the increase in the small claims limit will ‘encourage insurers to challenge unmeritorious claims, many of which are not now challenged because of the potential legal costs.’[3]

A large proportion of whiplash and soft tissue injuries will fall below the new limit. As of April 2020, any claim worth less than £5,000 will have to be made via the Small Claims Court, and therefore will not be eligible for legal costs.

These changes will prevent the number of fraudulent whiplash claims down, however they will also prejudice more vulnerable road users.

 

Who are Vulnerable Road Users?

Car occupants suffered the most casualties in 2016, but the majority of these were slight injuries (not serious injuries or fatalities).[4] Compared to car occupants, more vulnerable road users were killed or seriously injured on our roads in that same year.

Vulnerable road users include:

  • Pedestrians;
  • Pedal cyclists;
  • Motorcyclists; and
  • Horse riders.

Unlike car occupants, these road users don’t have the protective outer shell of the car to prevent injury in the case of an accident.

 

How will the changes to the Small Claims Limit affect Vulnerable Road Users?

Vulnerable road users are more likely to end up seriously injured as the result of an accident. However, any injury they sustain would have to be worth over £5,000 in order for them to seek legal representation.

Simple fractures of the wrist, cheekbones, ribs, damage to teeth and even injuries that lead to collapsed lungs are some examples of injuries that could all fall below £5,000 in value.[5] These can be common injuries for pedestrians and cyclists when they have been hit by a car. However, under the changes these groups of people will not be eligible to claim back the costs of legal representation in order to pursue a compensation claim.  This may lead to these road users sustaining pretty serious injuries or losses and not being able to gain any redress as a result.

Furthermore, cyclists often have bicycles which are worth a considerable amount of money, and often this can cause quite a bit of distress when they are involved in an accident. Unless the damage to the bike is worth more than £10,000 or the injuries are valued at more than £5,000, then it may take longer for these road users to return to the road.

As with the current system, the idea behind this is that a claim like this can be brought in the small claims court and there will be no need for legal representation as the claim will be straightforward. However, this will greatly prejudice potential claimants, as insurers will often have their own legal departments who will have access to legal knowledge and experience that potential claimants simply won’t have. What’s more, insurers will be able to use their legal department for free!

These changes risk putting vulnerable road users off from making a claim. Furthermore, by implementing these measures, the Government risks deterring people from travelling by motorcycle, bike, or on foot, as it will simply be safer to travel by car. Instead, the Government, should be aiming to promote these modes of transport and protect those who choose to travel in a way which is friendly to the environment.

 

Conclusion

The changes to the small claims limit will no doubt reduce the number of exaggerated or fraudulent claims being made. However, increasing the small claims limit for all accidents arising out of road traffic accidents risks prejudicing those vulnerable road users who have genuine claims and genuine injuries as a result of another road user’s negligence. It may perhaps be fairer to exclude vulnerable road users from the changes, as has been suggested by MP Catherine West in saying that these road users should be protected on our roads.[6]

It is not fair to punish these groups if they are involved in a non-fault accident, and so they ought to be exempt from the changes to the small claims limit. If you feel strongly about how these changes may affect vulnerable road users, then you can contact your local MP and ask them to support the motion to exempt vulnerable road users from the changes. For information on who your MP is or how to contact them, you can visit the Parliament website here: https://www.parliament.uk/get-involved/contact-your-mp/.

 

[1] Known as the ‘Guidelines for the Assessment of General Damages in Personal Injury Cases’

[2] The Law Society, ‘MOJ to increase small claims limit for motoring claims in April 2019 – read our response’ (Published 15th February) <http://www.lawsociety.org.uk/news/press-releases/moj-to-increase-small-claims-limit-for-motoring-claims-in-april-2019/>

[3] HL Deb 12 June 2018, vol 791, col 1641 <https://hansard.parliament.uk/lords/2018-06-12/debates/BAD8CBC4-5E52-48F1-93D8-6992453ABFFB/CivilLiabilityBill(HL)>

[4] Department for Transport, Reported Road Casualties Great Britain:2016 Annual Report (Table RAS30001, Published 28th September 2017) <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/668504/reported-road-casualties-great-britain-2016-complete-report.pdf>

[5] According to the Guidelines for Judicial College’s General Damages in Personal Injury Cases (OUP 2017)

[6] Law Gazette, ‘MP urges “common sense” on exceptions to Civil Liability Bill’ (Published 31st March 2018) <https://www.lawgazette.co.uk/news/mp-urges-common-sense-on-exceptions-to-civil-liability-bill/5065489.article>