Will the Government raise the small claims limit for personal injury?

Accident and personal injury lawyers are awaiting a Government consultation paper on raising the small claims limit for personal injury (PI) with interest.

The controversial proposal first came to light in May, after a Whitehall ‘whiplash’ summit with the motor insurance industry. The Government then said that raising the limit from £1,000 to £5,000 would make it “easier for insurers to defend spurious or exaggerated claims by ending the situation whereby it is easier and cheaper to settle claims than it is to fight them”.

At the time, then Justice Minister Jonathan Djanogly stated: “It’s totally unacceptable that we are seeing a disproportionate rise in whiplash claims when road traffic accidents are falling every year.”

It now seems the Government has back peddled, at least temporarily. In September Djanogly said that no decision had been taken on the issue and that none would be until, “all responses to the consultation document and other stakeholder submissions have been considered.”

So what has given the Government pause for thought? It’s possible the Government has been made aware of an independent report commissioned by the Association of Personal Injury Lawyers (APIL), which found that claims for whiplash injury compensation have actually fallen in the last 12 months.

In fact, figures from the Government’s own Compensation Recovery Unit show that whiplash claims have reduced by nearly 24,000 in a year. The APIL report went on to show that the vast majority of whiplash claims were neither “spurious” nor “exaggerated”.

But the proposals won’t just affect whiplash claims. Lawyers fear that, should the Government go ahead with its proposals, thousands of people with many different kinds of personal injury claims such as head injury claim will be unable to seek appropriate compensation.

“The small claims court is for minor consumer disputes not for injury claims up to £5k where liability and loss will need to be proved, using expert medical evidence, to the satisfaction of insurers and their lawyers,” says Stuart Kightley, head of accident claims at Osbornes Solicitors in London.

“If the Government goes ahead and raises the limit a claimant with, for example, a broken leg and loss of earnings will have to bring the claim himself or pay lawyers privately.”