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Proposed Change to the Small Claim Limit Foiled? Probably not yet

The Forum of Insurance Lawyers this week announced that they will be opposing the Government’s planned increase to the small claims limit to £5,000 and to remove general damages for minor soft tissue injuries.

They announced that they are ‘regrettably’ unable to support the AIB on this issue, saying ‘It is unfortunate that there has not been a willingness on the part of the government to wait until the effects of recent reforms have come to fruition before proposing further change’.

Very sensible I hear you say, but wait there was more….

‘What’s needed is a well thought through package of measures to bring about the government’s objectives’.

Those measures, as suggested by FOIL members, include:

  • Online access to justice for claimants (through the portal or by way of a new online process), which should make allowances for people with limited access to technology

  • Better regulation of Case Management Companies

  • A process allowing claimants to value their own claims

So although a small cheer may have been raised by claimant representatives reading the headlines this week, I suspect they were soon silenced when looking more closely at the detail.

FOIL’s suggested approach is clearly an attempt to cut out claimant solicitors from the process of making a personal injury claim, who they no doubt feel get in the way of reaching a quick settlement with the average injured victim.

Making a personal injury claim is a technical process and will preclude the average person from bringing a claim themselves even if the small claims limit is increased. A medical report must be sourced from an appropriate expert and the damages, both special and general, must then be assessed on the basis of the report. This is a specialised skill even in a claim for minor injuries/damage.

This is, in my opinion, why it is in fact quite unlikely that there will be the huge rise of litigants in person forecast by some commentators.

But there is an easy solution suggest FOIL. Why not create a simple online claims process (no doubt funded by the AIB) where medical experts (no doubt funded by the AIB) can be found and reports arranged, with a snazzy little online valuation calculator that can then tell you how much your claim is worth. In fact most defendant insurers have such a system, Colossus, why not use that?

I will not insult your intelligence by suggesting what this would do to the average level of compensation that victims would be paid, without the assistance of an expert with experience of negotiating settlements with defendant insurers and with the appropriate knowledge of the actual, not threatened, risks of rejecting an offer.

FOIL do make a valid point about using the small claims limit to reduce perceived high levels of fraudulent claims, which they think will do nothing. That must be correct. What will the average fraudster care if their case is now a small claim, indeed would they not prefer that the court has less resources to hear live evidence under cross examination? This could simply be playing into the fraudsters hands.

But I think claimant lawyers must treat FOIL’s entrance into the debate with some care, it looks like it might be a double edged sword.

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