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Small claims u-turn?

22 May 2018

As part of the 2015 Autumn Spending Review, then Chancellor, George Osborne, stated his intention to raise the small claims limit for personal injury claims from £1,000 to £2,000 and, for injuries arising from road traffic accidents, to raise the limit to £5,000 and to prohibit awards of general damages, for minor soft tissue injuries such as whiplash.

The Justice Select Committee has now called on the government to put those plans on hold whilst the litigation reforms already implemented over the past five years are evaluated. Conversely, the Ministry of Justice is pushing through the Civil Liability Bill to bring in the changes with an expected implementation date of April 2019.

The Justice Select Committee raises “concerns about the financial and procedural barriers that claimants might face. The Ministry of Justice has made some welcome moves to develop the electronic platform to compensate for claimants’ anticipated lack of legal representation. However, we remain to be convinced that this will be effective or sufficient… the small claims limit for personal injury should not be increased unless ministers can explain how it will make sure that access to justice is not affected.” The Committee warned there should be caution in proposing further reforms before the review of the Legal Aid, Sentencing and Punishment of Offenders Act was concluded, which is not expected to be completed until the end of this year.

The Civil Liability Bill was presented knowing that the Committee’s report was outstanding and it remains to be seen if consideration will now be given to the findings, given that the reforms are at such an advanced stage. It will certainly be interesting to see where the next year or so takes us, with the concern expressed by the Committee reinforcing the need to have the infrastructure in place before the changes are implemented and to ‘get it right first time’.

Whilst institutional defendants will welcome a reduction in spend on low value personal injury claims they will need to ensure that they have the resources to deal with increasing numbers of litigants in person, and poorly implemented reforms could increase the 'aggravation factor' for defendants.

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