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Shock Small Claims Limit Increase

The government has today made a surprise attack on personal injury claims as part of George Osborne’s spending review. The Small Claims Limit for personal injury claims is to be increased from £1,000 to £5,000, and compensation for whiplash claims will be curtailed.

The increase in the small claims limit flies in the face of the government’s relatively recent decision not to do so. In 2013 there was wide scale consultation on various personal injury issues, the upshot of which was that the transport select committee and the Ministry Of Justice recommended that the small claims limit should remain unchanged at £1,000. Since then, there has been no real warning that this issue was to be revisited and that there might be an imminent announcement on the subject. If the Small Claims Limit was to be increased then an increase to £5,000 was previously regarded as being at the extreme end of the scale.

This change would of course see claimants unable to recover their solicitors’ costs in an area where it is extremely unlikely that litigants in person would be able to pursue their own claims, with the result that after deduction of their solicitor’s costs, claimants will end up receiving a much lower percentage of their damages.

Still worse, the government has said that it intends to introduce measures to end the right to general damages for minor whiplash injuries, and will consult on the detail in the new year. It is believed to favour reimbursement of expenses and the cost of rehabilitation but to limit claims for general damages possibly by barring claimants who have not obtained medical treatment within say 14 days of the accident.

It appears that the government has taken advantage of a distant general election and an extremely weak opposition to push through most of the items on every motor insurer’s wish list. Christmas has come early for them, but sadly not for people who are injured through no fault of their own.

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