Concerns about access to justice as personal injury small claims limit set to rise

The Government is to press ahead with reforms affecting personal injury claims arising from road traffic accidents (RTAs) and aims to bring in these changes by April next year.

The so-called "whiplash" reforms will introduce an increase in the small claims limit from £1,000 to £5,000 for injuries arising from an RTA and are being brought in because the Government believes many claims currently are 'minor, exaggerated or fraudulent' and are leading to an increase in car insurance premiums for innocent motorists.

Many lawyers, including myself, have real concerns about how these proposals will affect access to justice for ordinary people.

The Law Society's president, Joe Egan, said recently: "The Law Society cannot accept that a £5,000 limit for motoring claims is reasonable. It will mean injuries such as facial scarring, fractured ribs, a bruised chest and whiplash to the neck will be considered 'small claims' and people will be forced to seek compensation without legal advice."

I wholeheartedly agree. It is essential that anyone who is unfortunate enough to be injured as a result of another person's negligence, omission or wrong has access to justice to seek compensation to put them back in the position they would have been had the accident never happened.

For other non-RTA cases, for example employer or public liability claims, the small claims limit will rise to £2,000. It is currently not known when this is expected to be introduced.

Impact

The reforms will have wide ramifications on future claimants.

Under the law as it presently stands, if the injury damages exceed £1,000, it allows a successful accident victim/claimant to recover either fixed recoverable legal costs from a defendant if the claim has a value under £25,000 or reasonable costs if the claim is over £25,000. This enables a claimant to seek legal advice and representation within a complex area of law as this allows for a contribution towards their legal costs.

A high number of RTA claims will fall within the £5,000 small claims limit, leaving many claimants unable to afford legal representation to pursue their own claim directly against the defendant's motor insurance company as a litigant in person.

In practical terms, this will leave many claimants unrepresented and at risk of under-settling their claims.

For the majority of people £5,000 is not a low value claim - it is not an insignificant amount of money. Many claimants do not take the decision to pursue a claim lightly. They have not chosen to be in the position they find themselves in and have to pursue a claim in order to seek to recover loss of income and other expenses incurred and because monthly bills as well as the rent and mortgage also still need to be paid.

Importance of sound legal advice

YouGov research commissioned by APIL found that injured people will find it difficult to claim compensation without help from legal professionals:-

• Less than one in five people are happy to pursue a claim in a small claims court without the help of lawyer;
• Two thirds of people with experience of making a personal injury claim would always use legal professionals to represent them in court;
• Only six per cent of all adults are confident that an insurer would offer them the correct amount of compensation if they did not have a solicitor helping them;
• Two thirds of people who have made a claim think it will be difficult to negotiate fair settlement with a defendant;
• A total of 61 per cent of premium holders would prefer to pay more for car insurance if the seriously injured received compensation to cover all their care and medical expenses;
• Almost 65 per cent of adults in Great Britain think that only the insurance company of the person who caused the car accident should be responsible for funding the injured person's care, treatment and rehabilitation (rather than the NHS).

Personal view

In my experience, the vast majority of claims are not 'minor, exaggerated or fraudulent' but entirely honest and damages paid to victims of accidents result from the negligent actions of a fellow road user. In the perfect world accidents would not happen, but they do and for a variety of reasons such as speed, lack of concentration, not leaving an adequate braking distance, to name just a few. It can happen to any one of us, at any time.

We should encourage reform to improve systems or processes, but it is imperative that in the interests of justice a fair balance is struck between the rights of innocent road accident victims, to ensure continued access to justice irrespective of their background or means, and the shareholders of motor insurance companies.

Let's not get blinded by any media hype or who has the ear of the Government - whichever side of the fence you sit. If an accident happened to you or a loved one, you would want to be able to seek redress from the party at fault and have a legal representative to support, advise and guide you as to your fundamental legal rights.

For the taxpayer, every claim must be registered with the Department for Work and Pensions' Compensation Recovery Unit to facilitate the reimbursement of state benefits paid and the cost of NHS treatment received by a Claimant as a result of a fault-accident.

We live in a civilised western country and that's why in the UK we all have to take out compulsory motor insurance should such an eventuality occur.

Wards Solicitors' Angela Carnell has more than 20 years' experience of representing claimants injured as a result of road accidents. For help on this area of the law, please contact her or any member of the Accident and Injury team.