Changes In Compensation For Road Traffic AccidentsPublished on: 23 May 2018
Back in 2017 the government announced proposed reforms in relation to the personal injury sector and, in particular, changes to the small claims court limit from £1,000 to £5,000 in road traffic accident claims and £2,000 in other personal injury claims. The limit is based upon the amount of the damages which are for pain and suffering and loss of amenity; these are referred to as general damages. Losses such as loss of earnings, medical treatment and care are excluded from general damages.
Victims could be unrepresented
I find the proposed reforms very concerning as I have acted for hundreds of victims of personal injury over a long period of time.
The current small claims court limit is £1,000 and is generally used for people who are not legally represented and is usually used to settle disputes about faulty goods or services.
Personal injury claims work very differently, with the victim having to prove not only negligence on the part of the defendant, but also causation which involves the production of medical evidence. Often the claims can be complex and difficult, under the current reforms a claimant would be unrepresented,, they would not have the support of legal assistance as the legal costs of a victim are not recoverable in the small claims track meaning that it may be uneconomic to instruct a solicitor. This would mean claimants would be self-represented, having to negotiate a claims process system and face professionally represented insurers where there could be disputes on liability and value.
I have dealt with many road traffic accident claims where the value has been below £5,000 and all of those cases have required legal skill and knowledge. The current reforms would force an injured victim into the small claims court to pursue their claim without legal knowledge, or potentially using all of their compensation to pay for legal assistance. Many victims may simply feel that they have no choice but to abandon their claim altogether. This is not access to justice and is a restriction to legal rights. Insurers claim savings will be passed to consumers
One of the purposes behind the reforms is based upon promises of estimated savings being passed from insurers to consumers, but I do not believe that this will happen. Insurance companies have previously made promises of savings for motorists, after previous legal reforms in 2013, and these have never been passed down to consumers. Also the public will be aware of their existing insurer issuing a renewal premium which isn’t their best price, which you would expect for loyalty. Often an online search of the market shows the same insurer quoting a lower premium, or the insurer will do so when asked to reconsider. Insurers rely on people just accepting the renewal premium. This practice evidences insurers cannot be trusted to pass on claims savings by way of lower premiums to the public.
Suggestions to put the plan on hold
I am pleased to see that MPs are now urging the government to halt the plan to increase the small claims limit, after a Justice Select Committee suggested the plan should be put on hold whilst a full evaluation of the reforms, over the last five years, has been undertaken, when concerns in relation to financial and procedural barriers claimants may face are considered, and ensuring access to justice is not affected.
I cannot understand how the government expects injured persons to deal with such claims themselves. Without proper legal help and support, how does the government expect the claimant to prepare appropriate allegations of negligence to be raised against the defendant, instruct medical and other experts and obtain medical evidence to establish causation and value the claim? In addition claimants will have to deal with funding court fees and the cost of expert reports.
The reality of the situation is that the only people who will win under the new reforms are the insurers, who are providing insurance to negligent drivers, and claimants simply do not claim for their entitlement to compensation for fear of not being able to understand what is involved in making their claim, and not being in a position to seek legal assistance. Even where claimants do feel able to proceed with a claim, the legal scales would be unfairly balanced with an individual acting against an insurer who has an unlimited pot of funding behind them, and an unfair knowledge and experience of what is required in order for the claimant to win their claim.
The actions of a few should not affect the many
It is often my experience that insurers deny liability when a victim has a good case, or offer a sum well below the damages that would be awarded by the court. Insurers are commercial operators whose only interest is to settle a case at the most economic figure, or avoid paying out altogether.
I accept that there will be the odd “rotten apple” trying to pursue a fraudulent claim, but the actions of the odd few should not mean the legal rights of almost half a million people are severely restricted. The government has already put into place a number of measures to detect fraudulent claims and repeat claimants, although it must be stressed that such claimants are in the minority.