MPs have slated government proposals to raise the threshold for small claims
Increasing the small claims limit from £1,000 to £2,000 for employers’ liability and public liability claims, and to £5,000 for road traffic accident-related personal injury, would create significant access to justice concerns, according to a report this week by the Justice Committee. The change would be made by secondary legislation. The winning side cannot recover legal costs for small claims, which means solicitors cannot represent them on a ‘no win, no fee’ basis.
Bob Neill MP, chair of the Justice Committee, said the proposed increase raises concerns about the ‘financial and procedural barriers that claimants might face’. Although the Ministry of Justice is developing an electronic platform to help unrepresented claimants, Neill said ‘we remain to be convinced that this will be effective or sufficient’.
The report, ‘Small claims limit for personal injury’, makes several recommendations, including that the government work with the Association of British Insurers to provide reliable data ‘that avoids conflating unexpected consumer behaviour with fraudulent activity’ and to ‘monitor the extent to which any reduction in insurance premiums can be attributed to these reforms’, and report back after 12 months.
It recommends that the small claims limit be increased, but only to £1,500, in line with inflation.
Other recommendations include that the national roll-out of the electronic platform be delayed until at least April 2020, with employers’ liability and public liability claims excluded, and that the senior judiciary conclude its examination of McKenzie Friends as soon as possible.
Separately, the Civil Liability Bill, currently before Parliament, would introduce a tariff system for compensation of whiplash claims.
Vidisha Joshi, managing partner of Hodge Jones & Allen, said: ‘At last a glimmer of hope from the Justice Select Committee for innocent personal injury victims.
‘This is hopefully an indication that the government will get a justifiable grilling when the Civil Liability Bill reaches the House of Commons. The government needs to study this report and act in the best interests of access to justice, not in the best interests of insurers as it has done to date.’
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