Proposed injury claim limits to come under Justice Committee scrutiny
Earlier this month the all-party Justice Select Committee announced the launch of an inquiry into government plans to raise the personal injury small claims limit. The committee intends to consider the full implications of increasing to £2,000 the small claims limit for personal injury claims with the exception of road accident-related soft tissue claims, for which a £5,000 limit is proposed. The MPs will also review the potential impact of this policy on the role of claims management companies and on the operation of the market for before-the-event legal expenses insurance.
Many legal commentators have expressed concern that, if the proposed changes are implemented, a significant number of potential claimants will effectively be denied access to justice as a result.
As the rules stand, a person injured in a road accident whose soft tissue injury claim is valued at just below £5,000 can instruct a solicitor, knowing that most of their legal costs will be paid by the responsible party’s insurer. If these insurer-backed proposals are implemented such a claimant will be personally responsible for all their legal costs and many are likely not to make a claim in the first place – presumably this is the insurers’ hope. Those who do bring a claim will find themselves facing a highly-trained insurance claims team backed by the insurer’s legal teams. Insurers have deep pockets and are skilled in the art of frustrating claims until they disappear.
Some media outlets suggest that soft tissue injury, or whiplash, is either exaggerated or fabricated and, clearly, sometimes this does happen – not all of society is as honest as we would like. However, detected fraud claims represent a very small percentage of the overall number of claims brought. All claims must be verified by an independent medical report prepared by a qualified expert and insurers have the right to fight any claim they feel is bogus or exaggerated, while the law allows courts to penalise dishonest claimants heavily.
It seems right and proper that, through the Justice Committee’s review, these proposed changes receive proper scrutiny. The insurance industry has a powerful voice and it is vital that changes to our laws are made for the good of the public rather than simply to increase the profits of the insurers.
Paul Lewis. PartnerGeorge Ide