Change to the small claims track limit
Reform to personal injury claims is a hot topic at present, with significant pressure being placed on low-value claims. Most notably government ministers decided recently that there will be an introduction of whiplash reforms in April 2019.
There was news on 23rd February 2018 that the Small Claims Track limits would increase for Road Traffic Accident claims. The increase to the Small Claims Track limit would be to £5,000 for “RTA related personal injury” claims. For Employers’ Liability /Public Liability claims the limit would increase to £2,000. This creates a difficulty in solicitors being able to recoup their costs on cases that fall below the £5,000 threshold. These changes are anticipated to be implemented around 1st October 2018. It is also expected that RTA claims will be subjected to a fixed tariff scheme. It is surprising that one of the announced reforms would be a ban on offers to settle claims without medical evidence. All claims would need a report from a MedCo accredited medical expert before any pay out. Following the Government’s Civil Procedure Rules, which came into force on 1st January 2016, all medical experts completing first reports for low value soft tissue injuries are expected to complete accreditation training. The result being, as personal injury lawyers know, that these reports are costly and time consuming. This is particularly so for a Claimant who may have fully healed from their injuries and yet still be expected to attend a medical examination before any offer to settle is made.
This accumulation of change is likely to put significant pressure on those firms who specialise in RTA claims. Claimants will face a reduction in the sums paid in damages and costs in relation to RTA claims that proceed on the Small Claims Track.
Further change seems to be in the air with The Association of British Insurers (ABI) confirming that the insurance industry will fund the creation of a new online portal for personal injury claims. Government ministers have accepted its offer in principle, “…to fund the initial build for the new portal, which will be managed via the Motor Insurers’ Bureau.” The Association of Personal Injury Lawyers (APIL) has reacted negatively to the news.
The concern being that it will undermine the ability of the claimant to hold the person who caused the injury to account. Such a reaction is far from surprising giving that the ABI will be funding and to a certain extent administering the portal. The ABI may not be seen as an impartial party with their main view being to prevent claims.
To conclude it needs to be asked whether, all this change could signal the death of low-value personal injury claims? It will certainly create difficulties for those firms who work largely in smaller claims management with an emphasis on RTA claims. Consequently they may be forced to diversify. Undoubtably there will always be people who have sustained personal injuries and it will be interesting to see how the proposed changes will take effect. In particular whether there will be a spike in litigants in person for low-value claims.
Notwithstanding the arguments made above, as the personal injury Small Claims Track limit last went up in 1991, the change is likely to be welcomed by many Defendants. There has been negative press on the “whiplash compensation culture”. Whiplash claims have often faced criticism as being explored for an “easy pay day”. Therefore it is not all gloom with the reforms being likely to herald a reduction in insurance premiums.