The Government has confirmed a number of reforms to the personal injury sector which are contained in the Prison and Courts Bill.
These include an increase in the small claims limit to £5,000 for road traffic accident related personal injury claims (e.g. whiplash). For all other personal injury claims, the limit will be £2,000.
The current limits are:
- £10,000 general limit
- £1,000 personal injury damages limit (the claim may include other damages up to the £10,000 limit)
- £1,000 housing repairs limit (the claim may include other damages up to £1,000)
The increase in the limit to £5,000 was previously condemned by Law Society president Robert Bourns who said the proposals:
“will completely undermine the right of ordinary people to receive full and proper compensation from those that have injured them – often seriously – through negligence. This five-fold increase will stop people getting the legal advice they need in order to bring claims for the compensation they are entitled to in law. People may be tempted to try to bring claims themselves without expert advice. This will clog up the court system creating a David and Goliath situation where people recovering from their injuries act as litigants in person without legal advice – those defending claims can often afford to pay for legal advice. This undermines ordinary people’s ability to access justice – especially if defendants refuse to accept liability forcing people to fight through the courts without legal help. Spinning this proposal as an attack on the “compensation culture” and claiming it will reduce premiums is misleading. If you are injured through no fault of your own you should be allowed to claim for that.”
The Ministry of Justice also plans to cap compensation payments for whiplash and for minor psychological claims such as shock or travel anxiety. Damages will be limited to:
- £225 for injuries up to 3 months
- £450 for injuries that last up to 6 months
- £765 for injuries lasting up to 9 months
- £1,190 for injuries lasting up to a year
- £1,820 for injuries lasting up to 15 months
- £2,660 for injuries lasting up to 18 months
- £3,725 for injuries lasting up to 2 years
Where there is contributory negligence, the judiciary may decrease the award – and in exceptional circumstances they will have the power to increase the award by up to 20%.
Additionally there will be a ban on offers to settle whiplash claims where no medical evidence has been provided. This change has been met with approval across the board, with the view that it should
“curtail the practice of some insurers trying to persuade people to settle for less than their claims are worth without evidence of the actual value.”
The measures are being introduced to quell the “rampant compensation culture” and target those who have “seen whiplash claims as an easy payday”.
Justice minister Sir Oliver Heald said:
“We are determined to get a grip on the widespread compensation culture that unfairly impacts millions of motorists through higher premiums. So we are cracking down on minor, exaggerated and fraudulent whiplash claims. And we expect insurers to fulfil their promise and put the money saved back in the pockets of the country’s drivers.”
The compensation tariffs for whiplash and the ban on accepting an offer without medical evidence should be implemented fully on 1 October 2018 by the Prison and Courts Bill.
The changes to the small claims limits only require secondary legislation so could be introduced sooner in theory – however, the Ministry has confirmed these will not be implemented until the Bill has become legislation.