Friday 13th March 2020
Government reforms of the Civil Liability Act are due to come into force in April 2020, which will increase the Small Claims Court threshold from £1,000 to £5,000 for road traffic accident claims (including whiplash) and from £1,000 to £2,000 for other personal injury matters. In practice, these measures will allocate more personal injury claims to the Small Claims Track where parties must pay their own costs and are therefore unlikely to find legal representation on a no win, no fee basis.
Whilst these measures are likely to be successful in reducing the number of fraudulent claims, particularly for road traffic accidents, the reform has attracted a lot of criticism from key industry figures who see it as impeding access to justice. Individuals who are genuinely injured may feel that the process of making a claim is too complicated without the guidance provided by legal representatives or that they don’t stand a chance against experienced defendant solicitors bankrolled by insurance companies.
The continuous reporting of negative media has created a stigma around some personal injury claims. However, independent studies have shown that whiplash fraud is actually very rare in the UK and that personal injury compensation levels here are already amongst the lowest in Europe. Therefore, there is much speculation that the Government has other motivations for these changes and is failing to be transparent about these.
Another key concern is the potential increase of claims management companies that could be established to fill the void left by legal practitioners, which may lead to unqualified, sub-standard advice.
It will be interesting to see how the Government tackles these challenges and whether it imposes safeguarding measures to protect vulnerable claimants.
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