Kerry Underwood

PERSONAL INJURY SMALL CLAIMS LIMIT GOING UP?

with 24 comments


Look here for Kerry’s new course on this subject

That title alone guarantees a large number of visits: nothing exercises the minds of lawyers more than this subject.

An increase in the personal injury small claims limit – currently £1,000.00 – is once again on the agenda.

Speaking on 18 November 2015 Justice Minister Caroline Dinenage said potential changes to the small claims limit will be included in the Insurance Fraud Task Force Report due out next month.

(Note: the Insurance Fraud Task Force is not a body tasked to look at the fraud that is Britain’s insurance industry; it was set up by former Lord Chancellor Grayling to look at alleged fraud by the British Public).

The report will also consider reducing the limitation period in soft tissue injury cases from three years to one year.

One of the most famous laws is the law of unforeseen consequences. The RTA Portal does not apply to small claims, that is currently claims under £1,000.00, and thus its scope is £1,000.00 to £25,000.00.

The vast majority of the 850,000 RTA Portal claims each year fall in the £1,000.00 to £5,000.00 bracket, so an increase in the small claims limit to £5,000.00 releases around 750,000 claims from the portal process.

Those claims will either have to settle or be issued at court as the portal process will not be available.

Very obviously there will be a huge increase in issued road traffic claims imposing a burden on an already creaking court system.
As no costs are recoverable in small claims it is safe to assume that very many of the claimants going to court will be Litigants in Person. Earlier this month, giving  judgment in Minkin v Landsberg [2015] EWCA Civ 1152 the Court of Appeal said:-

“73. The District Judges, more than any other level of the judiciary, are finding their lists are overwhelmed as a consequence of the increase in court time taken by each case where (as is now routinely the case) the parties appear as litigants in person.”

You ain’t seen nothing yet.

The cost to the state will rocket; the cost to insurance companies will plummet.

Why does it not surprise me that this government is once again considering this proposal?

Please see my related blogs:-

ISSUING SMALL CLAIMS TOGETHER TO MAKE A BIG CLAIM

LIES, DAMNED LIES AND THE SMALL CLAIMS LIMIT
INSURERS AT IT AGAIN (1) AND (2),

PERSONAL INJURY SMALL CLAIMS LIMIT AND THE MINISTRY OF TRUTH

CLINICAL NEGLIGENCE – DEFENDANTS AT IT AGAIN (3),

INSURERS AT IT AGAIN? (4)

INSURERS AT IT AGAIN (5)

EVER SEEN WORSE TH>N MORE TH>N? – INSURERS AT IT AGAIN (6)

MEDICAL DEFENCE UNION: A SUITABLE CASE FOR TREATMENT

SETTLEMENT AGREEMENTS IN PERSONAL INJURY

DLG LEGAL SERVICES & SOLICITORS CODE OF CONDUCT

SETTLEMENT AGREEMENTS IN PERSONAL INJURY

 

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Written by kerryunderwood

November 20, 2015 at 8:08 am

Posted in Uncategorized

24 Responses

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  1. Not only that, but how is this measure in any way going to tackle fraud? If fraud is alleged, the small claims track is hardly an appropriate forum for the dispute regardless of the size of the claim. Perversely, that means that the cases which the Insurance Fraud Task Force are tasked with considering will be virtually the only cases not affected by the proposed change.

    The only way to be 100% certain of completely eliminating fraudulent claims is to completely eliminate all claims. Sadly, that appears to the the government’s preferred option.

    Lee Coulthard

    November 20, 2015 at 9:51 am

    • Lee

      It is even worse than that. The portal process now involves compulsory “Ask Jeeves” or whatever about a claimant’s previous claims record. We can argue about the rights and wrongs of that but that will simple cease to apply to all of the claims – statistically nearly all claims – which are excluded from the portal if the small claims limit rises!

      Kerry

      kerryunderwood

      November 20, 2015 at 10:19 am

  2. […] PERSONAL INJURY SMALL CLAIMS LIMIT GOING UP? […]

  3. “Very obviously there will be a huge increase in issued road traffic claims imposing a burden on an already creaking court system.

    As no costs are recoverable in small claims it is safe to assume that very many of the claimants going to court will be Litigants in Person.”

    I think there’s something of a disconnect here. Should this new rule come in then I think far from being a huge increase in issued RTA claims there will actually be a very small increase, if any.

    This is because I suspect that the vast majority of low value claims are entirely lawyer / CMC driven. I would guess that the average claimant in such cases is extremely unlikely to take proceedings on their own initiative. In most cases the injuries are so minor – and let’s face it, in some case non-existent – that they will only pursue a claim if actively encouraged to do so on the promise that all the work will be done done for them.

    At present that active encouragement exists because lawyers / CMC’s can make money out of them. Without that incentive I suspect claim levels would fall by 90% or more.

    There is no way that someone who has suffered a minor soft tissue injury and little or no financial loss is likely to go through all the hassle of learning how to pursue a claim themselves. And for those who have suffered a genuine – but sub £5,000 – injury and / or financial loss most of them simply won’t have the technical ability to pursue a claim.

    Another factor limiting any increase in the number of claims that would be issued is that insurers may be more willing to settle minor claims anyway if they don’t also have to pay lawyers’ fees, if only to avoid the hassle of dealing with claims from LIP’s.

    And with regard to the issue of fraud I can’t see it being a problem. Sadly, fraudulent claims are only likely to be pursued by fraudulent solicitors because there’s money in it. They are the ones who, in league with CMC’s and others with a financial incentive, actively instigate and promote such claims. Once there’s no money in it I doubt many fraudulent claimants would have either the initiative or the intelligence and knowhow to fabricate effective claims by themselves.

    Michael Loveridge

    November 20, 2015 at 11:21 am

    • Michael

      I disagree with every word, but that is what blogs and comments are for! We will see who is right.

      Kerry

      kerryunderwood

      November 20, 2015 at 11:27 am

      • Apologies Kerry, yes it was the post from the other Michael I was responding to.

        Michael

        November 24, 2015 at 2:15 pm

    • Your post reads like a propaganda peice from the ABI!

      Lawyers do not pursue fradulant claims – despite what the insurers would have you believe. In fact we spend many hours weeding out and turning down such claims. Remove the lawyers from that screening process and the number off fruadulant or speculative claims will only increase.

      I can assue you that the Claimants themselves drive low value claims and are more than keen to take matters to court – even when their lawyers advise against it!

      Michael

      November 24, 2015 at 12:41 pm

      • (Excuse the spelling of my hastily typed post!)

        Michael

        November 24, 2015 at 12:42 pm

      • Think you must be confusing this post with another one. Don’t think an ABI propaganda piece would say what I do in the bracketed section or are you referring to the other Michael’s comment?
        Kerry

        kerryunderwood

        November 24, 2015 at 1:02 pm

    • “all the work will be done done for them” – AKA “access to justice”. But of course that’s far too nebulous a concept on which to hang a political soundbite. Far easier to say “fraud adds £90 to every policy”. I’m with Kerry on this one – the insurers should be in the dock, not running it.

      Offer Fox Ache

      November 24, 2015 at 8:19 pm

      • As confirmed by today’s news re the small claims limit and abolishing general damages for whiplash.

        kerryunderwood

        November 25, 2015 at 6:19 pm

  4. “And for those who have suffered a genuine – but sub £5,000 – injury and / or financial loss most of them simply won’t have the technical ability to pursue a claim”
    And would you consider that to be fair Michael?

    Nick Bettridge

    November 20, 2015 at 5:02 pm

  5. This would only spell the end for PI solicitors not CMCs. I’m with Kerry on the number of claims staying high and Claimants being left to tackle the trial by themselves.

    Damian

    November 23, 2015 at 3:55 pm

    • Although solicitors with considerable experience of contingency fees will be OK

      kerryunderwood

      November 23, 2015 at 3:57 pm

  6. […] Kerry, again, on Personal Injury Small Claims limit going up? […]

  7. Ah – a battle of the Michaels!

    kerryunderwood

    November 24, 2015 at 2:32 pm

  8. […] PERSONAL INJURY SMALL CLAIMS LIMIT GOING UP? […]

  9. Dear Kerry
    Have you read the document entitled ”Conservative Party Interests Relating to the Insurance Industry”?
    if not if you could send to me an email address I will forward it on. It really is quite something.
    regards
    Anthony

    Anthony

    December 2, 2015 at 12:39 pm

  10. This is the document referred to be Anthony – http://leftfootforward.org/images/2012/01/Conservative-Party-Financial-Interests-Relating-to-the-Insurance-Industry1.pdf – if the document is accurate then there is a clearly a significant conflict of interest between the Government and the insurance industry given the level of the payments made (also bear in mind that the report was from June 2011)

    richardcoulthard

    December 4, 2015 at 7:07 am

  11. To lose your right to compensation.
    Why because it costs the insurance companies?
    What about all the people employed in the law industry?
    Insurances have the chancellor in there pocket.
    Save 50 pounds on insurance we have heard that before. Pass on the savings won’t happen.
    Small claims courts well this will end up costing the country more that means each tax payer.
    Winner insurance companies & people like the chancellor. Same as the banks no fines no caps. Bail bank out first then sell shares to rich to become richer.

    Sid

    January 5, 2016 at 4:09 pm

    • Agree with most of that, but it is a profession, not an industry. Lawyers and others seeing law as just a way to make money, rather than being a vocation, allows the government to get away with this sort of thing.

      kerryunderwood

      January 6, 2016 at 5:12 pm


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