Posts Tagged ‘small claims’
Developing policy on Alternative Dispute Resolution
Many people acknowledge that if disputes can be resolved in ways that do not involve a hearing in court, this can be more effective and flexible than litigation. But use of alternative dispute resolution (ADR) has been constrained by the fact that, for it to take place, both parties need to accept that this would be the preferable way forward. There has been a reluctance to requires parties to use ADR.
In July 2021, the Civil Justice Council published an important report in which it argued that it would not be unlawful for the use of ADR to be made mandatory.
In August, 2021, the Ministry of Justice published a Call for Evidence seeking information about the use of ADR to resolve family, business and other civil disputes away from the courts. The paper makes clear that, in a post-Covid world, it is important to rethink some of the ways in which dispute resolution and how they should be changed to improve access to justice, reduce cost, and deliver fairer outcomes.
Experience from a number of other countries suggests that an element of compulsion in the use of ADR is important in achieving broader acceptance of the use of ADR.
It is unlikely that detailed policy initiatives will be announced for some time. But it seems to me that policy makers and the senior judiciary are working together to create a more postitive context within which ADR will become a central feature of the dispute resolution landscape.
The Civil Justice Council’s Report is at https://www.judiciary.uk/announcements/mandatory-alternative-dispute-resolution-is-lawful-and-should-be-encouraged/.
The Ministry of Justice’s Call for Evidence is at https://www.gov.uk/government/news/views-sought-on-dispute-resolution-vision. Submissions are sought by the end of October 2021.
Whiplash reform programme: implementation
Way back in March 2019 I noted the enactment of the Civil Liability Act 2018. One of its principal objectives was to introduce a new way of dealing with claims for ‘whiplash injuries’ suffered when a car is hit from behind, causing those in the front car to suffer whiplash. It had been planned that the new scheme would come into operation in April 2020. The Government has now announced that it will commence on 31 May 2021.
The Whiplash Reform Programme provides, among other things that:
- A fixed tariff of compensation will determine the personal injury damages claimants will receive for whiplash injuries. Until now, most whiplash claims are determined by negotiation rather than by a ruling from a judge. The tariff – set by the Lord Chancellor – will in future decide the issue. The levels of compensation will be reviewed by officials every three years.
- There will be a ban on settling whiplash claims without medical evidence. It was argued that, in the past, insurance companies paid out on small claims which had been made without any supporting medical evidence because it was not financially worth their while to resist them. The effect of paying out on unmeritorious claims was to increase the costs of motor insurance, to the detriment of motorists who did not make unwarranted claims.
- A new online official Injury Claim Service will be established which will enable claimants to source medical reports to ensure claims are supported by medical evidence before settlement.
- The Small Claims Track (SCT) limit for Road Traffic Accident related Personal Injury claims will be raised from £1,000 to £5,000. This means that the majority of such claims (which are for sums under £5,000) will no longer be subject to fast track rules, where the recovery of legal costs operates on the ‘loser pays’ principle but will be allocated to the SCT, where parties are responsible for paying their own legal costs.
It is hoped that the introduction of the Official Injury Claim Service which has been designed to provide claimants with a user-friendly digital system, supported by guidance, will enable all claimants, particularly those without legal representation, to make and settle their own claim pre-court. It is also hoped that the new system will stop unmeritorious claims from being made.
Since these changes are expected to result in insurance companies being able to reduce their overhead expenditure on motor insurance, insurers are required to provide to demonstrate that they have passed any savings on to customers.
Further information on the new scheme is at https://www.gov.uk/government/publications/whiplash-reform-programme-information-and-faq
Transformation of the justice system: money claims online
In November 2018, HM Courts and Tribunals Service launched its money claim online service. On July 3 2020, it announced that a significant milestone had been reached in the use of this service, namely that, after 18 months, over 100,000 cases had gone through the new system.
The Government states:
The service aims to make it simpler and quicker for people to submit a claim, by allowing them to do so from their own home and removing complex legal language from the online application. Most people take less than 15 minutes to complete the initial claim form. Almost 9 in 10 people using the service have been satisfied or very satisfied with it, with claims now being issued in minutes, not days.
In many cases, this that means claims can be issued, responded to and settled without the need for third-party involvement.
See https://www.gov.uk/government/news/more-than-10000-civil-money-claims-issued-online
(The figure IS 100,000, not the 10,000 mentioned in the Press Release Heading!)
Money claims on line
For many years it has been possible to start a small money claim by completing forms on-line and submitting them to the court.
In April 2018, following a pilot launched in July 2017, a new on-line process for making a money claim with a value of up to £10,000 (the current small claims limit) has been launched, designed to be easier to use by potential claimants. Rather than having to fill in and post a paper form, or use the original on-line system which dated from 2002, the new pilot allows people to issue their County Court claim more easily, settle the dispute online and also recommends mediation services (which can save time, stress, and money).
According to the Press Release announcing this decision “Early evidence [from the original pilot] suggests that the online system has improved access to justice as engagement from defendants has improved.”
At present, it seems that the only way that one can see how the new process works in practice is to go on-line and submit the details of a potential claim – this includes setting up a special account. What I think is urgently required is one of those ‘how to’ videos that are available on You Tube. (There are videos with this or similar titles but they don’t specifically refer to the new MoJ scheme.)
The press release announcing the development is at https://www.gov.uk/government/news/quicker-way-to-resolve-claim-disputes-launched-online.
If you would like to explore the money claim website more fully, it can be found at https://www.gov.uk/make-money-claim
Changing the small claims track
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
Compensation culture: cutting down ‘whiplash’ claims
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:
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/
Public expenditure review: impact on the Justice system (2): the future of personal injuries litigation
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/
Martin Partington: Introduction to the English Legal System 15th ed 2021
Oxford University Press Learning Link Resources
Martin Partington: Spotlight on the Justice System 