Proposed Reforms in Relation to Changes to the Small Claims Court LimitPublished on: 07 January 2021
In 2017 the government announced proposed reforms in relation to changes to the small claims court limit in personal injury claims from £1,000 to £5,000 in relation to road traffic accident claims, and £2,000 in other personal injury claims. The idea behind the reforms means that claimants who suffer injuries deemed to be worth less than £5,000 in a road traffic accident and less than £2,000 for other personal injury claims will need to make their claim without legal representation as they will not be able to recover any legal costs.
The original date for implementation of April 2019 has now been postponed on three occasions with the latest expected date of implementation of 6 April 2021. However, with only three months left to go there is still little information available as to how exactly the system will work, as the Ministry of Justice have still not published the rules and procedures.
The world is dealing with COVID-19, which has impacted everyone in some form, the delay of publication of the rules cannot solely be down to the pandemic. The proposals for the reforms date back to 2017 and if the implementation date is to go ahead, early publication of the rules and procedures is critical. I have always had serious concerns in relation to the proposed changes, because of the impact being unrepresented by a lawyer may have on injury victims.
There are many aspects of the reforms that have not been thought through and an unintended consequence may be to drive claimants into the arms of claims managers. What is clear is that there appears to be a big issue in relation to what happens if the value of a claimant’s claim cannot be agreed. There is supposed to be a system to avoid the need for the claimant to have to go through the small claims court, but it does not appear that at this stage, a workable solution has been found. The system has only recently been reformed, and that is working well so surely there is no need for any further reform. The fact that so many issues still need resolving, over three years since the reforms were proposed is an indication that things should be left as they are.
It is not surprising that the insurance industry is now calling for the Ministry of Justice to publish the rules, because, of course, they want claimants to be unrepresented in bringing their claims. If the reforms are not to be scrapped, I would like to see the government take their time in considering the reforms, to ensure personal injury victims are not deprived of access to justice. The delays in publication of the rules are not benefiting anyone.
I am also concerned some claimants may be waiting for the reforms to come into force before commencing their personal injury claim, as they may believe it is better for them to deal with their claim directly with an insurer, without legal representation, as this will mean more damages for them on conclusion of the claim. However, this will not necessarily be the case. The insurance industry does not want claimants to be legally represented, because they know a claimant will usually be advised by their legal team to obtain medical evidence in support of their claim. This will ensure that the injuries suffered, and their outcome, are fully investigated which can often lead to an increase in the value of a claim. The legal team will also advise the claimant against consideration of any offers which are made before any medical evidence is obtained. This can be frustrating for the insurers as they want to settle the claims as soon as possible for the lowest amount possible. Most importantly most clients will have no idea as to the likely award that would be made by a court, and there is a serious risk of insurers taking advantage of unrepresented claimants.
I am also concerned that some potential claimants may be waiting to start their claims because of the COVID-19 pandemic. These claimants should not wait. The current proposed date is 6 April 2021 and that will soon come around and there is every chance COVID-19 will still be prevalent at that time.
We can offer clients over the telephone or on a virtual platform such as WhatsApp or Zoom. I have started several new cases using virtual platforms as a way to provide appropriate advice and this has worked well.
The role of the legal team is more than just obtaining the correct compensation for the victim of a personal injury claim. It is also about ensuring clients have the appropriate rehabilitation to provide them with the best possible outcome in relation to their injuries sustained. And to help those with serious life changing injuries have all the right information with respect to their entitlement to benefits, and organisations, in their area, which can provide them with help and support, and to support them when going through the legal process. Having this team approach means it allows a claimant to focus on the most important thing, which is recovering from their injuries.
I would encourage anyone with a potential claim not to delay and to seek advice as soon as possible. The tariffs under the reforms mean damages for whiplash cases will be much less than they are now, and it is still not clear whether or not this will only apply to an accident after the implementation date, so it is better to start a claim as soon as possible. COVID-19 does not appear to be going away any time soon and whilst it is not clear whether the current reform date of 6 April 2021 will be met, changes are likely at some point in the future.