Lawyers have reacted with dismay to plans to raise the small claims limit and scrap whiplash damages, announced in Chancellor George Osborne’s Autumn Statement.
Osborne said he would raise the small claims limit to £5,000 and abolish general damages for soft-tissue claims (which include whiplash injuries). Addressing the House of Commons, he said: “We’re going to bring forward reforms to the compensation culture around minor motor-accident injuries. This will remove over £1bn from the cost of providing motor insurance…so motorists see an average saving of £40-£50 per year off their insurance bills.”
Association of Personal Injury Lawyers (Apil) president Jonathan Wheeler says: “Only two years ago the government ruled out increasing the small claims court limit because there were no adequate safeguards to protect genuine claimants.
“There are still no adequate safeguards. If the small claims court limit is raised to £5,000 all that will happen is that genuine victims of injury will not be able to afford the legal help they need to bring genuine claims and there will be an epidemic of cold calling from claims management companies as they rush to take advantage of vulnerable people who won’t be able to afford legal representation.”
On the plans to abolish whiplash claims, he says: “In 2012 the insurance industry promised the government that if reforms to the way whiplash claims are handled were introduced, savings would be passed on to motorists through their premiums.
“All that has changed since then is that the insurance industry has failed to live up to its own promises. Since 2012 the portal [a streamlined system for dealing with personal injury claims] has been extended, medical reporting for whiplash claims has been completely overhauled, sharing of fraud data has been introduced and solicitors fees have been slashed.
“Government figures show whiplash claims have fallen by more than a third in the past four years. Yet still insurance premiums have increased.”
Osborne said the closure of underused courts would free up £700m for new technology in courts, and that old prisons such as Holloway would be sold allowing £1.3bn to be spent on nine new prisons.
Chairman of the Bar Council Alistair MacDonald QC says: “Investment to modernise courts and tribunals is vital to the successful reform of our criminal justice system and today’s Ministry of Justice settlement safeguards the £700m announced earlier this year.
“Proposed overall resource savings of 15% and a 50% cut in the department’s administrative budget, are obviously a big concern. Whatever plans have been made to implement these cuts, we urge the government to ensure that access to justice, particularly for the most vulnerable, is not further restricted.”
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