The government recently announced its proposal to raise the small claims limit for personal injury claims to £5,000. If this proposal goes ahead as planned, the increase from the current £1,000 is likely to have a major impact on the number of claims filed in the court by personal injury victims. Whiplash victims in particular will find it especially difficult to file a claim for compensation.
Under the prevailing terms, any person who sustains whiplash injuries as a result of a road accident that is no fault of theirs can get legal representation in order to claim compensation for their injuries.
However, if the limit is raised to £5,000, many of the standard whiplash claims that are filed for an amount smaller than that will not fall into the small claims category. This means solicitors will not be able to recover their legal costs from the other party, making it almost impossible for them to take on these claims.
Without access to legal representation, claimants would have no other option but to represent themselves and cover their own legal costs if they want to take their claim to the court. This is no easy task for a lay person who is not knowledgeable about the many legalities and formalities involved with filing a claim for compensation for a whiplash injury.
The Reason Behind the Proposed Change
The government’s explanation is that the prospective changes are aimed at reducing the huge number of fraudulent claims that are typically linked to whiplash claims. Increasing the limit could potentially save the motor insurance industry an estimated annual amount of £1bn while also saving motorists an estimated £40 to £50 annually on their insurance bills.
Although at first this sounds like very good news for insurance companies and policy holders, there is nothing to substantiate these statements. Several promises have been made before with regards to lowering the amount of motor insurance premiums but none of these have materialised. Another concern is that genuine whiplash victims will not be able to get the compensation that they are legally entitled to.
In his address, Justice Secretary Chris Grayling explained that honest drivers have been bearing the price of the system for too long and it was time to put measures in place to dissuade people from abusing the system. He also stated that there were plans afoot to implement more advanced techniques to medically diagnose and confirm whiplash injuries.
Procedures too would be more streamlined in order to to deter fraudulent claims and only bring authentic cases in front of judges.
Supporting the proposed change, the Government stated that whiplash claims of a smaller value are usually pretty clear-cut and better suited for the small-claims track, which is a cheaper and more suitable venue for whiplash victims.
How This Will Affect Personal Injury Victims
If the proposal does eventually come through and the small claims limit is raised to £5,000 many victims of whiplash will feel as though they have been obstructed from justice. Without access to affordable legal representation, the majority of victims will not consider claiming compensation that may be rightly owed to them if they have been injured in a no-fault accident.
The promise of huge savings on insurance premium amounts does not justify the denial of justice to those who deserve it.
What Professionals Have To Say about the Proposed Change
Not surprisingly, professionals differ in their opinion of the proposed change, with some totally supportive of it and others against it.
According to a spokesperson from Aviva, this change could save motorists about 10% on their premium, eliminate costly lawyers from the equation and help reduce the number of nuisance calls that people receive, all of which are positive results.
The director general of the Association of British Insurers, Huw Evans, is also for the change. He supports his vote by saying that it is a significant breakthrough in tackling the compensation culture” and it will be beneficial to motorists.
Stephen Gaywood, the director of AA’s counter-fraud department is also vocal about his support. According to him, if a claimant is provided the necessary treatment such as physiotherapy instead of monetary compensation, it would discourage those who simply want to make a fast buck from an injury claim.
However, others such as John Wheeler, president of the Association of Personal Injury Lawyers, thinks otherwise. According to him, the insurance industry had in 2012 promised the Government that savings would be passed on to motorists if changes were made to the way whiplash claims were handled. Since then, a number of changes have been made to the process, including the extension of the portal, reduction in solicitors’ fees and overhauling of medical reports for whiplash claims.
However, insurance premiums have still gone up steadily and none of the customers have been given any kind of savings by the insurance companies. He also argues that it was just two years ago when the Government decided not to increase the limit of the small claims court because they found that adequate safeguards had not been provided for people who had suffered from a genuine injury. Since that time, nothing has changed.
By removing the right of genuine claimants who have been injured by the negligence of someone else and due to no fault of their own, the Government will be showing a callous indifference to the pain and suffering faced by these individuals.
Jonathan Smithers, President of the Law Society, also feels that this move by the Government will undermine the rights of citizens and prevent them from getting the compensation that is owed to them due to the negligence of others.
He feels that if the proposal stops allowing legal advice for personal injury claims that are below £5,000 then people will also stop claiming for serious injuries resulting from road traffic accidents that they may considered to be minor.
A petition has now been put forth to the Government in order to review the proposal and possibly keep the small claims limit to £1,000 instead to increasing it to £5,000.
