Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Posts Tagged ‘small claims

Changing the small claims track

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In November 2015, the Government announced that it planned to increase the small claims limit for personal injuries to £5000. Following a consultation on making reforms to soft tissue injury claims (often referred to as whiplash injury) the Government has now (March 2017) decided that while Road Traffic Accident claims for less than £5000 should stay in the small claims track, the small claims limit for other personal injury claims should become £2000. It plans that these new limits should be in effect by October 2018.

The Government is also intending to ban the settlement of whiplash claims unless  medical evidence  is provided of the alleged injury.

For details see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/593431/part-1-response-to-reforming-soft-tissue-injury-claims.pdf

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Written by lwtmp

March 29, 2017 at 3:14 pm

Compensation culture: cutting down ‘whiplash’ claims

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Those who argue that a compensation culture has developed in our society – with too many people willing to seek compensation for things that have happened to them – often point to the numbers of claims made for soft tissue injuries occurring in road traffic accidents (RTAs), commonly referred to as ‘whiplash claims’

In 2015, the Government announced that it wanted to reduce the incentives on people bringing whiplash claims. It has now published a consultation paper setting out its ideas in more detail.

The package includes measures to tackle the high numbers of minor RTA related soft tissue injury claims by either:

 (a) i.removing compensation for pain, suffering and loss of amenity (PSLA) following an accident or
ii. reducing compensation for PSLA by setting a fixed amount payable (£400 or
£425 if there is a psychological element) for these types of claim.
(b) reducing compensation for PSLA for other RTA related soft tissue injury claims
where recovery takes longer than for those covered by measure (a) above through
the introduction of a set tariff of compensation;
(c) raise the small claims limit for all personal injury claims to £5,000 (by reference to
the value of the PSLA element of the claim). This would have the effect that the
legal costs of such claims would no longer be recoverable from defendants in the
majority of soft tissue injury claims, although certain costs arising from litigation
(for example the costs of issuing the claim) and a number of disbursements (for
example the cost of the medical report) could still be claimed by a successful
claimant; and
(d) ban pre-medical offers to settle RTA related soft tissue injury claims, so in future
claims could not be settled without medical evidence provided by MedCo accredited practitioners.

 

Measures (a), (b) and (d) will require primary legislation and the government intends to legislate as soon as parliamentary time allows.Measure (c) requires changes to the Civil Procedure Rules (CPR). There will also need to be amendments to relevant Pre-Action Protocols including the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents.

It is argued that these changes could reduce the cost of insurance claims by around £1bn annually.

The Consultation will provoke strong views, and are likely to be fiercely resisted, particularly by those who represent claimants. If implemented, the reforms could also have significant impact on Claims Management Companies.

The outcome of the consultation is not yet clear, nor, importantly is it clear when time for the required legislation could be found. But it is an issue that is unlikely to go away, even if implementation is still some time off.

The Consultation can be found at https://consult.justice.gov.uk/digital-communications/reforming-soft-tissue-injury-claims/

 

Written by lwtmp

November 23, 2016 at 11:02 am

Public expenditure review: impact on the Justice system (2): the future of personal injuries litigation

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A totally unexpected announcement in the 2015 Autumn Statement relates to how personal injuries cases are to be dealt with in future. The statement says (at p 125):

3.103 Motor insurance – The government will bring forward measures to reduce the excessive costs arising from unnecessary whiplash claims, and expects average savings of £40 to £50 per motor insurance policy to be passed onto customers, including by:

••removing the right to general damages for minor soft tissue injuries (Claimants will still be entitled to claim for ‘special damages’, including treatment for any injury if required and any loss of earnings);

••removing legal costs by transferring personal injury claims of up to £5,000 to the small claims court.

This announcement has caused consternation amongst PI claimant lawyers since, by moving many more cases into the small claims track, they will not be able to claim their costs from the insurers when they win. This will result in many claimant lawyers giving up this type of work.

Two consequences seem likely to follow:

First, insurers will be able to put more pressure on claimants to settle on terms dictated by the insurers.

Second, claims management companies may well try to find ways to move in to this work.

Despite the fact that many claimants may end up with a lower level of damages than they might have done had they been represented by a lawyer, many will think that the estimated reduction in insurance premia is a price worth paying to ensure that the costs of small claims are more proportionate than they currently are.

There might, however, be another way of looking at the issue.

In Ireland, the Injuries Board – established by Act of Parliament in 2003 – can deal with all personal injury claims on line. The injured party submits details of the accident and the injury; the insurer makes an offer; and this is assessed by an independent assessor with practical experience of PI and familiar with current trends on the awards of damages by the courts.

There is no compulsion to use the system, but it is free to claimants who win their case, and the services costs much less for the insurers (though still makes an annual surplus).

An analogous scheme already operates in the UK for dealing with tenancy deposit disputes.

The full statement  is downloadable at https://www.gov.uk/government/publications/spending-review-and-autumn-statement-2015-documents.

For the Irish Injuries Board, go to http://www.injuriesboard.ie/eng/

Written by lwtmp

November 30, 2015 at 12:51 pm