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Chancellor announces major reform to low value injury claims

26 November 2015
The Chancellor has used his autumn statement to announce plans that will drastically reform low value injury claims. 

The government had already indicated an intention to revisit the injury small claims limit in the forthcoming Insurance Fraud Taskforce report, but Osborne has pre-empted the report by announcing an increase to £5,000. The effect of the reform (subject to any change to the small claims costs rules, which appears unlikely) will be to dramatically reduce legal costs available in low value cases. 

A ban on general damages for minor soft tissue injuries is also planned, though special damages including treatment costs will remain available. A consultation on the detail of the reform is expected in the new year. 
James Arrowsmith, partner at insurance law firm Browne Jacobson, said:

"The reforms will amount to a significant blow to many injury law firms, who are already experiencing a challenging market. However, it is expected that claims management companies and appropriately geared  ABS firms will attempt to plug the gaps created, using, for example, damages based agreements and rehab provision to bolster their balance sheet."



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