PERSONAL INJURY SMALL CLAIMS LIMIT WILL BE £5,000
Kerry will deal with the small claims limit rise and contingency fees in his Small Claims, Portals and Fixed Costs course in March to May of this year – click here
The Autumn Statement to the House of Commons this afternoon contained an announcement that the small claims limit for all personal injury claims will be raised from £1,000 to £5,000. No date has been set but it is likely to be April 2017.
Courts will be prohibited from awarding general damages for pain, suffering and loss of amenity in minor soft tissue injuries, but “Claimants will still be entitled to claim for “special damages” including treatment for any injury if required and any loss of earnings.” So, an injured person will have to prove their claim and get medical evidence accordingly, but will then get no general damages for those proven injuries.
In reality that means that the small claims limit for whiplash will be £10,000 as it is only general damages which has the lower threshold, currently £1,000 but to be raised to £5,000. Absent general damages the small claims limit is and will remain £10,000.
The proposals are at page 125 at section 3.103 and read, in full:
Insurance
3.103 Motor insurance – The government will bring forward measures to reduce the excessive costs arising from unnecessary whiplash claims, and expects savings of £40 to £50 per motor insurance policy to be passed onto customers, including by:
removing the right to general damages for minor soft tissue injuries;
removing legal costs by transferring personal injury claims of up to £5,000 to the small claims court.
Claimants will still be entitled to claim for “special damages” including treatment for any injury if required and any loss of earnings.”
The raising of the small claims limit does not require primary legislation. My view is that the removal of the courts’ power to compensate for a tort does require an Act of Parliament.
Please see my related blogs:-
PERSONAL INJURY SMALL CLAIMS LIMIT GOING UP?
LIES, DAMNED LIES AND THE SMALL CLAIMS LIMIT
PERSONAL INJURY SMALL CLAIMS LIMIT AND THE MINISTRY OF TRUTH
Kerry Underwood 
Love the understatement in the last sentence!
Sent from my Samsung Galaxy smartphone.
stevecornforth2012
November 25, 2015 at 4:51 pm
Thanks Steve 🙂 – not that there is much to smile about!
kerryunderwood
November 25, 2015 at 5:08 pm
And still we don’t have a definition of ‘minor soft tissue injuries’. What exactly is that? Who decides what is minor and what isn’t? Is it a subjective or an objective test? I agree Kerry – to remove the right to claim for an aspect of tort cannot simply be signed through by Mr Osbourne and his bench. It is a law of the land and needs dealing with accordingly.
Deb Murphy
November 25, 2015 at 5:01 pm
Would not be surprised if the proposal to ban general damages for whiplash gets lost somewhere, but small claims limit will go up.
kerryunderwood
November 25, 2015 at 5:05 pm
If your reply is right Kerry (and I suspect it is) the CMC free for all we have all anticipated will occur. I suspect that the CMC’s will run the small claims on a DBA (is the maximum % likely to move upwards ?) and refer the higher value ones by some technically compliant method as are currently used to the ‘panel firm’ who will be scrabbling for the work. This is the USA model you predicted in 1999,2000,2001 etc etc
dominicmoss
November 25, 2015 at 5:13 pm
I suspect that you are right Dominic.
kerryunderwood
November 25, 2015 at 5:42 pm
Assuming this is all about money and savings to the public (which it clearly isn’t), have the government stopped to think about the cost to HMRC?
£1 billion saving on insurance premiums – 9.5% of that is IPT so circa £95m in lost revenue overnight.
Roughly 50% of my PI firms turnover ends up back in the governments pocket in VAT, Corporation tax, National insurance, income tax and council tax. The stationary, the IT support etc… etc… all employ people and pay tax.
Rehab costs are not Vat-able.
Then there are the defendant insurers, presumably they pay their file handlers to deal with the claims – not AVIVA mind, all their employees seem to be in India – but you get the gist. Then of course there’s the defendant law firms, again, they pay their tax, overheads VAT etc…
Then we look at the insurers…. most are based abroad, Gibraltar, Isle of Man etc.. they aren’t liable for VAT so contribute nothing in that regard. NIG recently got caught out trying to swindle the UK out of £600m of VAT by complex offshore umbrella schemes. Many insurers make their profit abroad and don’t pay a bean to the UK in tax – RSA prime example. They even employ foreign staff who contribute £0 in NI/income tax (Aviva).
People are compensated and spend that money in the UK so roughly 20% of that goes to HMRC so your average £2500 whiplash £500 of that can be considered VAT.
The true cost to the UK will be far worse than the expected saving, with the money just ending up in offshore tax havens (ironically like the aptly named Haven insurance based in Gibraltar). The impact has not been thought through properly and all to save £3-4 a month in premiums.
sam
November 25, 2015 at 5:54 pm
All completely true. Also the Compensation Recovery Unit only recovers benefits from defendant insurers if a claim is made, so the benefits bill will rise sharply.
kerryunderwood
November 25, 2015 at 6:10 pm
They might as well just come out and ban/exclude whiplash claims.
Are ‘soft tissue injury’ claims today the psych claims of old? (i.e. so poorly understand that it’s easier to just assume that they’re made up)
I also agree with the comments by Sam re tax revenue from the legal sector and Kerry about the benefit to the economy of CRU liabilities.
robertpettitt
November 25, 2015 at 6:31 pm
Whiplash seems to be an irrational obsession with politicians of all parties – remember Jack Straw? I just don’t understand it.
kerryunderwood
November 25, 2015 at 6:34 pm
I suppose we will just have to operate on the basis that the client will pay the FRC that would have been paid plus the success fee. Won’t leave client with much though. ATE boys will be in trouble too and BTE how’s that going to work. Oh George did you think it through ?
dominicmoss
November 25, 2015 at 6:49 pm
Yes – taking 40% instead of 25% if settled pre-issue works from around £3,000 up. Currently £500 portal + £750 = £1,250. 40% of £3,000 = £1,200. Problem is on anything that gets issued
kerryunderwood
November 25, 2015 at 6:54 pm
Hi Kerry
If this is the case then it will be the death knell for the personal industry lawyer.
Yours sincerely
*From:* Kerry Underwood [mailto:comment-reply@wordpress.com] *Sent:* 25 November 2015 16:49 *To:* jan@wolflaw.co.uk *Subject:* [New post] PERSONAL INJURY SMALL CLAIMS LIMIT WILL BE £5,000
kerryunderwood posted: “The Autumn Statement to the House of Commons this afternoon contained an announcement that the small claims limit for all personal injury claims will be raised from £1,000 to £5,000. No date has been set but presumably it will be April 2016. It should be “
wolflawsolicitors
November 25, 2015 at 6:53 pm
As mentioned above it can be made to work pre-issue if not too much work done, but anything that needs to be issued is a problem, so lawyers likely to take only the safest cases.
kerryunderwood
November 25, 2015 at 6:56 pm
But we’re assuming that clients will accept 40% deductions when they can go through their insurer for “free”. It’s all good saying we will get you more and were independent but 40% is 40%!
On another note if I was an insurer I would refuse to deal with any claim from a solicitor. Let you issue and go to court. See how long we stay in business when that happens… Very sad times.
Sam
November 26, 2015 at 7:23 am
Sam – they do in other areas- employment for example. Courts have wide discretion to award costs in small claims if unreasonable behaviour. Likely to exercise that discretion if defendants force solicitors to issue.
Kerry
kerryunderwood
November 26, 2015 at 7:49 am
I appreciate courts powers to award costs for unreasonable behaviour, but what if the insurers offer you £2,500 for a 12 month neck injury and £100 for loss of earnings against £300 claimed? You are issuing proceedings and potentially heading for a disposal over £500-600, the costs will act as a barrier resulting in a windfall for the insurers as many will accept. Of course increased profits for insurers is not what any of this is about….
sam
November 26, 2015 at 3:03 pm
But Sam that is what the rest of us have to do all the time! It is only PI where the limit is £1,000. When we do much more difficult work the limit is £10,000. We get nothing from the other side in family or employment. Personal injury work will still have recoverability and a small claims limit that id half any other.
Kerry
kerryunderwood
November 26, 2015 at 3:11 pm
Hi Kerry
Yes agreed but I’m talking about where they offer you £2500 on a claim worth £3000 but won’t budge. You know it’s low but you also know that to get more you will have to issue. Client won’t pay the issue fee so it’s £200 out of office ac (forget fee remission, by time you send it they return it asking for financial statements etc you’ve wasted an hour so may as well pay the fee) then you have to comply with directions, file bundles and a attend court…over £500. Assuming a 30%DBA that’s £150inc VAT plus delaying settlement for another 6 months. I doubt there are many law firms prepared to do that. Most likely, awards will drop and the system abused by insurers making low offers and digging their heels in – they are laughing all the way to bank (that we all bailed out).
Sam
November 26, 2015 at 9:21 pm
Before we get onto new arrangements, am I right in thinking we need to get all work in progress issued by 6th of April 2016 to avoid being small claims tracked?
Rohan Pickard
November 25, 2015 at 7:03 pm
Yes
kerryunderwood
November 25, 2015 at 7:06 pm
sorry but do you mean 2017 here and not 2016?
Melony
February 10, 2016 at 2:29 pm
2017
kerryunderwood
February 10, 2016 at 5:59 pm
Sam – join the non pi world where we all have to do this all of the time.
Kerry
kerryunderwood
November 27, 2015 at 1:22 pm
Busy times ahead! Presumably post April 6th Medco is out of the window and we can instruct whoever we want again operating totally outside the RTA Protocol?
Rohan Pickard
November 25, 2015 at 7:12 pm
Good question. Makes no sense to unleash 750,000 portal claims in to the old process, so maybe portals will remain, but with no costs if claim is under £5,000
kerryunderwood
November 25, 2015 at 8:09 pm
Where the only disincentive for not using the Portal is being penalised in costs I fail to see how they can force people to use it in circumstances where there are no costs to be awarded.
Daniel Higgins
November 26, 2015 at 2:42 pm
True
kerryunderwood
November 26, 2015 at 2:45 pm
Does the supposed ban on right to recover damages for minor soft issues apply to employers liability claims and public liability claims or just RTA’s?
Ian
November 25, 2015 at 7:59 pm
Not dealt with, but my guess is just RTA’s.Government is to consult on this, but not the small claims limit rise, in the new year.
kerryunderwood
November 25, 2015 at 8:06 pm
Rise in EL/PL fraud??
MB
November 26, 2015 at 11:36 am
Much harder than RTA
kerryunderwood
November 26, 2015 at 12:20 pm
Looks like someone at Aviva has Georgie boy’s ear as Govt appears to be about to implement their recommendations set out in their March 15 report “Road to Reform”. Always thought that loss in tax revenues would make the Govt loathe to make such a significant change.
Craig Porter
November 25, 2015 at 8:15 pm
Yes, it will cost the government a fortune.
kerryunderwood
November 25, 2015 at 9:02 pm
Is it possible for a solicitor to act for a client on an old fashioned private client basis in small claims court , and contractually limit costs at each stage – say pre-issue, post issue up to hearing and hearing and not charge until the end of case?
Ian
November 25, 2015 at 8:17 pm
Yes and can have a pre-issue contingency fee agreement combined with a conditional fee agreement if the cases issued. Can do more or less anything provided no exploitation of client.
kerryunderwood
November 25, 2015 at 9:01 pm
But presumably on a contingency fee basis you would need to limit costs to 25% of damages which would result in no profit.
Is a private client agreement where you agree to charge a max percentage of damages a contingency fee agreement or not? Is that how you could charge more than 25%.
Sam
November 25, 2015 at 9:36 pm
No restriction on charge to client under a pre-issue contingency fee agreement or on hourly rate post issue. Restriction only applies to success fee element and to Famages Based Agreements.
kerryunderwood
November 25, 2015 at 11:11 pm
How does that work?
Ian
November 25, 2015 at 9:56 pm
Or a contingency fee for everything i.e. regardless of what stage you succeed at you take x%. Issue every single denied case. No expert liability evidence – not for small claims track. Poor disclosure – doesn’t matter, go with what you get because if they haven’t disclosed what they ought to they’re screwed. If they disclose what they ought to after issue, seek an order for payment of costs.
Quick fast directions – be ready with brief small claims statements. Get friendly chambers to provide baby barristers in their second sixth for the brief – £150 if they win. Don’t bother with medical reports – use medical records and statement only. Prepare, offer with all disclosure for quantum and issue. No extensions of time for defences. Tailor everything to small claims so standard everything except statements and medical evidence.
Be very very lean. Client wants an update they can call or just drop them a short email. Standard advice (despite the courts not liking generic advice) and go for it.
But I’ve no doubt a small claims protocol will come in to justify continuing with the portal. Just make sure the standard of representation does not drop i.e. do a good job.
Separately I’m wondering what this means for clinical negligence, if anything.
H
Hxyay
November 25, 2015 at 11:21 pm
Judges will increase damages as well – always do when small claims limit goes up.
kerryunderwood
November 26, 2015 at 7:52 am
The autumn statement States:
Motor insurance – The government will bring forward measures to reduce the excessive costs arising from unnecessary whiplash claims, and expects average savings of £40 to £50 per motor insurance policy to be passed onto customers, including by:
• removing the right to general damages for minor soft tissue injuries1
• removing legal costs by transferring personal injury claims of up to £5,000 to the small
claims court (13)
What does the 13 in brackets relate to? I presume that this is only in relation to motor claims? Why should claimants not be able to recover for soft tissue injuries in an RTA but be able to recover them if they are injured through the negligent actions of another e.g tripping and slipping claims. Makes no sense really does it?
David
November 25, 2015 at 8:49 pm
None whatsoever.
kerryunderwood
November 25, 2015 at 8:58 pm
Can’t trace what the (13) means.
kerryunderwood
November 26, 2015 at 10:01 am
All dealt with during my courses 😄
kerryunderwood
November 25, 2015 at 11:12 pm
I agree entirely with the comments above.
By my (very) broad brush calculations, the government is set to lose at least £250-300 million per annum from these changes. Taking into account the VAT payments on Solicitors/Medical fees (around £200 million), loss of income tax (around £60-70 million based on an assumption that around 10,000 – 15,000 people work in roles associated with these claims – solicitors, paralegals, insurance claims handlers, support staff, medical agency staff, telesales, CMC staff), loss of employers NI contributions on those staff (say another £40 million), loss of Court fees (£10 – 15 million)
This is before you consider loss of corporation tax, increased benefit payments for those out of work or any VAT payments which may have been associated with ‘introduction’ or ‘marketing’ fees
Total loss to the government before the next election = in excess of £1 billion
We have had 2-3 reviews of the small claims limit in the last 10 years, all of these have decided against increasing the limit and now Osborne has ignored these reviews and the financial impact to the Government and decided to go ahead anyway.
The only ones to benefit from this is the insurers.
Perhaps Cameron should have made it clear at the election that if you voted Tory that the Prime Minister was going to be Aviva and Axa were going to be Deputy Prime Minister
richardcoulthard
November 26, 2015 at 7:45 am
I agree entirely.
kerryunderwood
November 26, 2015 at 7:54 am
[…] “The raising of the small claims limit does not require primary legislation,” he wrote on his blog. […]
small claims gap
November 26, 2015 at 9:00 am
Kerry – thoughts please on :
1) Define minor injury as stated above, and people have not used term “whiplash” for years, it’s the politicians that lag behind.
2) What power will anyone have ( APIL, MASS combined ) to delay any changes?
3) Won’t claimants potentially exaggerate injuries “even further” to get above the magic 5k? ( fraud ).
4) How are Med professionals feeling this morning??!!
Thanks
MB
November 26, 2015 at 11:23 am
Michael
1. It will be by value, for example no award to be made if general damages less than £5,000.
2. None. Parliament, not APIL or MASS is makes the law in this country.
3. Difficult to get many soft tissue injuries above £5,000 generals.
4. good point!
Kerry
kerryunderwood
November 26, 2015 at 11:32 am
Thank you, but won’t “Soft tissue” all of a sudden become serious back, neck, shoulder, injuries in some hard faced cases? to get above 5k…….where there is a will……..
MB
November 26, 2015 at 11:47 am
Michael
Clearly some claims that would now be £3,500 to £5,000 will be over £5,000 but difficult for £2,500 to £3,000 to increase to that level, and remember any exaggeration and you now lose the whole claim – section 57 Criminal Justice and Courts Act.
Kerry
kerryunderwood
November 26, 2015 at 11:53 am
Do you have any thoughts on the costs consequences for cases in the portal prior to the rise but settled after ? Will being put on the Portal count as being issued ? Also are you going to amend the content of your birthday tour to suggest new funding arrangements ? I am beginning to think we should start putting these in place as of now in our client care letters.
dominicmoss
November 26, 2015 at 11:37 am
Historically has always been date of issue which determines which track it is on when there is a change in small claims limit. I do not think being in the portal will count as being issued; that is the way section 57 of Criminal Justice and Courts Act was implemented – it only applies to claims issued on or after 14 April 2015. There proceedings were specifically defined as “proceedings started by the issue of a claim form”.
Just sending out email to all previous delegates saying I will deal with these issues in my Portals and FRC course.
Had first client in today signed up to 40% contingency fee as we will not issue by April.
Kerry
kerryunderwood
November 26, 2015 at 11:50 am
Other political issues;
1. BTE cover can only go up as current premiums of say £25 only good for operating in current regime not when 80% plus of all PI claims would result in a payout by the BTE insurer to get the Claim handled.
2. Unions- one of the main benefits pushed by the unions is legal representation for members, as in 1. above that model is not sustainable going forward
keith.teare.62@gmail.com
November 26, 2015 at 11:48 am
Keith
BTE has pretty much disappeared as insurance companies can no longer sell claims and also due to Consumer Contracts Regulations – customer has to opt in, not opt out and cost of legal expenses element of premium must be stated and deducted if customer does not want it. fair point re unions.
Kerry
kerryunderwood
November 26, 2015 at 11:56 am
BTE will just use their opt out clause (quantum to merits matrix).
I also heard that some BTE insurers pass Clients on to a solicitor that then guarantees a 100% comp but then requie Clients to pay a premium out of their damages.
So not a 100% guarantee and BTE LEI fee is basically money for a solicitors number.
robertpettitt
November 26, 2015 at 1:19 pm
BTE more or less gone now
kerryunderwood
November 26, 2015 at 1:20 pm
BTE has always been a racket when it comes down to an actual proper indemnity being provided – i.e they have just been used as a claims capture mechanism to sell the case to the panel lawyer who has signed a “hold harmless” agreement not to ever claim against the BTE policy. This is why they cost £0.50p per policy before they are retailed on at £30 a time.
So will BTE reform to exclude PI cases in the SCT or will these insurers actually provide an indemnity for once in their lives? My money is on the former
Lee Jones
November 26, 2015 at 2:15 pm
Not aware of BTE ever covering small claims
kerryunderwood
November 26, 2015 at 2:21 pm
Instead of taking a bigger % (such as the 40% you suggest) is there any problem with charging a fixed fee plus the 25% for cases under £5k ? For example £750 for cases that settle in the Portal (assuming it is extended to SCT cases) £250 for stage 3, and stepped costs outside or post issue based on the current FRC table ?
dominicmoss
November 26, 2015 at 12:15 pm
With proper drafting can do what you want, along as you do not exploit the client.
kerryunderwood
November 26, 2015 at 12:21 pm
Surely, on that basis most issued cases would be uneconomical for the client to pursue to litigation, current FRC levels of costs leaving them with very little? It seems to me that a bigger % across the board would allow you to offset the less profitable litigated cases with the ones that settle quickly pre-issue.
Damian
November 26, 2015 at 2:56 pm
Thanks Kerry, I think that’s my plan. It’s really just the same as acting for any client in a SCT civil matter. See you on the course. Dom
dominicmoss
November 26, 2015 at 12:34 pm
🙂
kerryunderwood
November 26, 2015 at 2:21 pm
As a car is a dangerous weapon, can the claim not be brought under a different tort and ignore a negligence claim as such? Or can they truly dismiss the Law of Tort altogether?
Bruce
November 26, 2015 at 12:58 pm
The small claims limit is £10,000 already for non-personal injury claims, so if you could found the claim other than in negligence, which I doubt, then you would have a £10,000 small claims limit, not £5,000.
Parliament can do what it likes – the doctrine of the sovereignty of Parliament.
Kerry
kerryunderwood
November 26, 2015 at 1:05 pm
Kerry
Thanks for helpful commentary.
I have a new client, and right now I don’t think it will be possible to get medical evidence by next April, let alone be able to justify issuing proceedings.
I see you have already signed one up to a contingency fee, so it may be that you take a similar view.
Whilst I appreciate it is not best practice, what do you think about the possibility of just issuing proceedings (whatever the state of medical evidence) as close as possible before the new deadline, and then serving them within 4 months once a medical report has been obtained? That would give us all another 4 months to get medical evidence, and possibly enable us to justify taking on claims for an extra month or so, and still be able to recover costs.
I do appreciate it is just putting off the inevitable for a month or so.
Andrew Barrett
November 26, 2015 at 12:59 pm
Andrew
Yes – but court will almost certainly exercise its discretion and award no costs if you issue during a pre-action protocol period. The old “premature issue” cases will be dug up.
Kerry
kerryunderwood
November 26, 2015 at 1:07 pm
Is that on the basis that this raise is coming in. What happens if the case settles prior to the change in limit.
I am still trying to get my head around this – for example if we take on new work under £5000 in January / February which will be on portal etc then once the limit increases it will have retrospective effect on those cases unless we issue – but i assume we simply cant issue just to protect our costs?
Gerald Evans
November 26, 2015 at 1:22 pm
There is no entitlement to pre-issue costs in an unissued case – that is why you always make it a term of the contract. Insurers agree as otherwise you issue and get even higher costs. You have never had a right to issue “to protect” your costs. In the past the key date was always the date of issue and this is what happened when the limit doubled two years ago in everything else.
Kerry
kerryunderwood
November 26, 2015 at 1:26 pm
The mirror (newspaper) states that there will be no savings until 2017. What is the reality that these reforms will not happen until October 2016 / April 2017?
Lee Lacey
November 26, 2015 at 1:06 pm
If anything portalled by April is costs-bearing then lower costs will not kick in until late 2016.Fiancial review is for 2016/17. Not sure what the Mirror said – are you sure it was not about premiums?
kerryunderwood
November 26, 2015 at 1:23 pm
Cheers for the helpful reply – so assuming this comes in 1st April 2015 and protocol period is 90 days any cases taken on from 1st January could not be issued unless denied as protocol period would not expire by 1st April and if we did we run the risk of not getting costs of proceedings
Gerald Evans
November 26, 2015 at 1:48 pm
Correct. Might in fact be October 2016, but work on basis of April 2016.
kerryunderwood
November 26, 2015 at 1:55 pm
Could you do an either or retainer with client – ie if case settles for less than £5000 then you take 40% on DBA and if over success fee at x% on a CFA basis
Gerald Evans
November 26, 2015 at 1:56 pm
Yes- but needs careful drafting.
kerryunderwood
November 26, 2015 at 1:59 pm
Kerry
I’ve been in emergency meetings all morning so I write with anything but a clear head! I appreciate your help regarding the retainers we ought to be considering now, but wonder if there is anything stopping us using a standard CFA but with an overall cap of 40% of damages? Is the problem that it currently states “You are entitled to seek recovery from your opponent of part or all of our basic charges….”?
Simon Baskind
November 26, 2015 at 1:59 pm
Simon – all dealt with on my courses. You can agree anything with client as long as you do not create a DBA and do not exceed the success fee cap in a CFA.
These are complex drafting issues
Kerry
kerryunderwood
November 26, 2015 at 2:02 pm
Maybe say ‘might be entitled’ can I reccomend everyone here to ask Kerry to come in to their practice and look at their situation I know of no one that understands the interplay of the various rules and regs as well. We did and you learn to think on the right lines .
dominicmoss
November 26, 2015 at 2:24 pm
Thank you Dominic!
kerryunderwood
November 26, 2015 at 2:27 pm
Couple of points :
Fraud – if they are going to commit fraud they will do it anyway and it will be with vehicle damage and hire as well as PI. They are not bothered if the solicitor is paid or not. So an increase in the limit will do nothing to combat fraud. If anything, the legitimate claimants where they honestly say “I was suffering for 3 months but now I’m ok” will not receive anything. What shall we do, ban cars? On the plus side, that will stop car crime which the honest motorist is also paying for!
Intervention – What of the volume PI firms, if they go bust as a result of the increase, who is going to clean up the mess? No one will want the files transferring to their firm. S&G share price has plummeted and may go down further. Most are on the edge as it is. the cost of intervention for those firms who see no future is frightening. Its going to be carnage.
sam
November 26, 2015 at 2:29 pm
Kerry
I note your comments on issung everything before April
But from recent history when such changes were implemented it was either the date of accident (cause of action) or date CNF submitted.
To do otherwise would be grossly unfair and make firm’s current WIP worthless overnight.
Several very big players have in recent days effectively bought other firms WIP in for millions, where does that leave them if only worth something if they issue?
Why would provisions this time require everything to be issued rather than use date of accident or notification of claim via Portal?
Keith
November 26, 2015 at 2:44 pm
I’m not sure Gov’t care much about fairness but you would hope they would be aware of the meltdown that the already struggling court service would encounter if there is a last minute issuing frenzy.
Damian
November 26, 2015 at 3:00 pm
Nice injection of fees for them…………
kerryunderwood
November 26, 2015 at 3:04 pm
Wrong – it has always been date of issue when small claims limit changes, most recently April 2013 and was with the introduction of employment tribunal fees, the increase in court fees, the 2014 County Court Jurisdiction Order and most recently section 57 was introduced by reference to date of issue, and that is far more significant than changing the limit. There is no entitlement to cost pre-issue unless proceedings have been issued. The liability is that of your client. Paying for WIP is a fairly obvious illegal referral fee.
I would be very surprised indeed if it was anything other than date of issue.
Kerry
kerryunderwood
November 26, 2015 at 3:02 pm
Damian – that is the way it works for everything else!
kerryunderwood
November 26, 2015 at 3:04 pm
Fair point but surely the potential volume is unprecedented.
Damian
November 26, 2015 at 3:14 pm
No – less than employment tribunal claims, less than divorce, less than debt.
kerryunderwood
November 26, 2015 at 3:18 pm
Hi Kerry,
I tend to agree – SCL will rise; curtailing the right to claim for ‘minor’ soft tissue injury will get lost along the way, is probably a “Russian front” – would not get through the Lords.
Am I right in thinking that MedCo is an irrelevance in as far as SCL claims are concerned;, that if a medical report is commissioned, then it does not have to be commissioned through MedCo?
Regards
Ian
Ian Austin
November 26, 2015 at 3:05 pm
At present yes, but I suspect portal may be extended to cover small claims once limit goes up.
Kerry
kerryunderwood
November 26, 2015 at 3:08 pm
I wonder as the implementation date cannot be certain ,could a current-style CFA include the right to be brought to an end so the retainer can be re-negotiated, if the matter falls in the SCC jurisdiction subsequently?
Michael haycock
November 26, 2015 at 3:26 pm
With proper drafting you can do anything. It is not rocket science – small claims limit went up in April 2013 for everything else.
kerryunderwood
November 26, 2015 at 3:31 pm
Hi Kerry
I can’t seem to get clarification on whether the government will “consult” on the scl ie allow stakeholders to put forward their views/evidence or is it done and dusted and just a case of when/how to implement?
What are our options at that point? JR for example?
Thanks
Sam
Sam
November 26, 2015 at 9:31 pm
Sam
No consultation – we had that in May – General Election- stakeholders are the electorate .Zero prospect of successfully bringing Judicial Review proceedings – see Unison cases re employment tribunal fees. Few countries in the world now have costs following the event.
Kerry
kerryunderwood
November 27, 2015 at 1:19 pm
Whilst I’m not sure this will make any difference – a petition has been started regarding the small claims track limit – https://petition.parliament.uk/petitions/113810
richardcoulthard
November 27, 2015 at 8:21 am
Hi Kerry
Its more or less final that the small claim limit is going to rise to £5000.00 but what are firms who deal with predominately pi files under 5k for generals to do now. Have you a course on what other areas we could do niche areas.
Thanks
Sobia
November 27, 2015 at 8:55 am
Hi Sobia
No, a course would be too general – different firms would be attracted by different things. However I can do this on a consultancy basis and tailor it to your firm’s requirements. Please contact me on 01442 430900 if you are interested.
Kerry
kerryunderwood
November 27, 2015 at 1:05 pm
I am still trying to get my head around this matter. Courts have no jurisdiction to award damages under £5000, am I right in saying JSB guidelines will still exist and on admitted personal injury”low value” claims, the insurers can make offers of under £5000.00. The only issue is that we can not issue court proceedings.
My question is, what happens if the insurers or the file handler at the insurers happen to have a bad day and decides not to make an award or makes a silly low offer… where do we go?
On the other hand literature is saying that Claimants are not entitled to make a claim for personal injury valued under £5000.00 besides the specials. if the claimant has no specials and the matter is admitted where would my costs be coming from?
faz
November 27, 2015 at 4:19 pm
I think that you are confusing two different things. It is proposed that the small claims limit in personal injury cases goes up to £5,000. That does not affect the right to issue proceedings in any shape or form or to seek the proper level of damages, which is your professional duty. Obviously you sue if you do not get a proper offer and go to trial as you do now, but you will not recover costs if the sum awarded is £5,000 or less.
If the separate proposal to prevent claims for general damages in minor – whatever that means – soft tissue claims is passed by Parliament and there are no specials then there is no cause of action and you will not get costs from anyone, because there is no claim. There will be no admission – there is nothing to admit. No figure has yet been given as to what is considered “minor”
I do not know what literature you are referring to – I suggest that you consider the Autumn Statement presented to the House of Commons and the speech to the House of Commons by the Chancellor of the Exchequer.
Kerry
kerryunderwood
November 27, 2015 at 4:29 pm
An a member of the public. If I start a claim for under £5,000 for a soft tissue injury before this change is implemented will the claim disappear in a puff of smoke if the change is implemented before the case settles?
Robbie
November 27, 2015 at 5:11 pm
No. You are confusing two different things,. Small claims limit will be date of issue – get it in before and you get costs – get it in after and you do not.
Prohibition of claim is extremely unlikely to be retrospective – so if you have the injury before the Act of Parliament comes in to force you will be OK.
Also no indication that the definition of “minor” will be £5,000 – that is actually a serious and substantial soft tissue injury.
Kerry
kerryunderwood
November 27, 2015 at 5:15 pm
Hi Kerry
When the limit goes up in April anything in the portal we will get nil from insurers? Is that correct
Also how can we try and get cases allocated which initially start in small claims due to generals being under 5k into fast track . Can we argue Complex issues ? Etc
if so what will be classed as complex
Kit
November 28, 2015 at 7:05 pm
Kit
No, only claims of less than £5,000 will be affected. For those you will get nothing, just as in all other claims under £10,000. No costs at all are recoverable in family or employment – personal injury is very much the odd one out. No chance of getting small claims in to fast track unless exceptional circumstances – position will be same as for all other claims under £10,000 – rare to be allocated to fast track. Many non-personal injury claims are complex – that is not a reason to escape small claims track. Essentially the issue is one of proportionality.
Kerry
kerryunderwood
November 30, 2015 at 8:36 am
Kerry do you really think they can increase small claims limit in April 2016? Because I assume consultation period will last approx 4 months and The Ministry of Justice has foreshadowed that the consultation process will not start until January 2016 and that the earliest date of implementation for any changes in minor whiplash cases will likely be April 2017.
Mohammed Islam
November 29, 2015 at 10:50 pm
More likely to be October 2016, but if you work on the basis of April 2016, then you will be well-prepared.
Kerry
kerryunderwood
November 30, 2015 at 8:27 am
Also government previously have consulted twice to raise the small limit to £5000 but decided against it?
1. What’s the difference now?
2. Any chances of government changing their pledge after consultation?
3. How long consultation will last?
4. How soon can government implement change ( if any ) after conclusion of consultation?
5. Can we pin our hopes on consultations?
M Islam
November 29, 2015 at 11:31 pm
1. They won the General Election with an overall majority. Last time simply put it off – did not reject it – a point I have repeatedly made in my blogs over the last two years.
2. Not sure what the reference to consultation is; this is a fiscal measure in the Autumn Statement which will be voted on by Parliament; it does not need legislation. Stopping awards in sift tissue does. no, is the short answer.
3. See above
4. If subject to negative resolution of either house, 40 days, but can engineer motion for negative resolution and then vote it sown; effectively 21 days;
5. No – the consultation was in May 2015 and the government was returned with an overall majority.
Kerry
kerryunderwood
November 30, 2015 at 8:32 am
Kerry,
Was planning on coming to your course, but it might be too late now! Fixed costs course dates start 8/4/15.
I appreciate that this is all novel and complex, but I worry that there might be things that could/should be done now, but will be too late come April.
John
John Ibbotson
November 30, 2015 at 10:07 am
John
October most likely date for small claims increase. Shortly I will announce a new half day course on personal injury small claims, including model contingency fee agreement.
Kerry
kerryunderwood
November 30, 2015 at 4:37 pm
Thanks, I will be on that one!
As I say, my worry is what we could/should do now.
John Ibbotson
December 1, 2015 at 2:34 pm
John
Can go through everything and provide all documents in a consultancy as soon as you want. Contact me on 01442 430900 or Kerry.underwood@lawabroad.co.uk if interested.
Kerry
kerryunderwood
December 1, 2015 at 3:28 pm
Hi Kerry,
ive just read in the law gazette that the chnages are to come into effect in 2017? is that the case
kit
November 30, 2015 at 11:44 am
No – just checked with Gazette – that refers to scrapping general damages – small claims limit likely to be earlier.
Kerry
kerryunderwood
November 30, 2015 at 12:05 pm
hi kerry
The gazette actually refers to both. “george osborne propsed banning general damages for ‘minor’ soft tissue injuries and increasing the small claims procedure limit for all personal injury claims from £1000 to £5000. The changes are due to come into effect in 2017”
kit
November 30, 2015 at 12:11 pm
I know. It is wrong. Not certain that small claims limit will go up before 2017, but it is likely to. Govt statement, which I have tweeted ,clearly refers only to scrapping general damages as not coming in until 2017, which strongly indicates small claims limit will be in in 2016.
kerryunderwood
November 30, 2015 at 12:15 pm
sorry kerry just for my own piece of mind when do you think small claims limit will increase – April or october 2016? is it defintiely not april 2017?
kit
November 30, 2015 at 12:25 pm
On balance I think October 2016 as if April think announcement would already have been made.
kerryunderwood
November 30, 2015 at 12:30 pm
I have just read law gazette today, it says both changes will come into affect April 2017 is that correct?
Mohammed Islam
December 1, 2015 at 6:33 pm
No, and the Gazette accepts that it is wrong – please read the “Thousands sign petition” bit on the Gazette website where correct information given.
kerryunderwood
December 1, 2015 at 6:36 pm
Kerry
With pi having a protocol, would you not face a challenge to your right to costs if you issued everything just to beat the deadline like what has happened on previous scl rises? I am thinking about he cases you had that we’re still within the PAP.
Surely the def would argue portal, pre issue costs or no costs at all for blatant disregard of the PAP?
Stephen
December 1, 2015 at 10:13 pm
Stephen – yes if you issued while still in the protocol period you would risk being hit Hardin costs, but if you are outside and have made a serious Part 36 offer, even if you do not match it,then there should be no problem.
Kerry
kerryunderwood
December 1, 2015 at 11:13 pm
hello. I’m a catastrophic lawyer, but there is no way my firm will be able to support the dibs that I can carry on a case of mine for many years without the quick turn over cases. this really is appalling for the general public and lawyers of both sides of the fence. however there is a view that the low valued pi will be for say 1k and not the full 5 k of the new SC limit. this will allow you to charge your client for say 1k to 5 k cases that will now be on the SC. does anyone have views on this? this would mean there is a business model of sorts.
chris walker
December 1, 2015 at 9:26 pm
Good point. Fees on a contingency fee basis- say 40% – can work. Issue is whether defendants will force claimant lawyers to do too much work, but that is no different from situation with fixed costs. Also no Part 36 in small claims track, so major defence weapon gone. For what it is worth I do not think scrapping general damages will get through Parliament.
Kerry
kerryunderwood
December 1, 2015 at 11:20 pm
Thanks Kerry, as ever the “devil is in the detail”. I also agree with you re Parliament’s reluctance in passing the removal of a tort.
Chris Walker
December 2, 2015 at 9:14 am
Dear Kerry
Where does the 40% come from. Have I missed anything here. And are any business models starting to appear.
All the best
CHRIS LEWIS
December 2, 2015 at 11:08 am
Chris
Just my view of what market will bear from my experience in non personal injury work, especially employment and also the experience in other countries where costs do not follow the event, eg the United States.
Different firms have different models but I suspect 40% will be the new 25%. I am available for a consultancy😄👍
Kerr
kerryunderwood
December 3, 2015 at 5:00 pm
Indeed- the devil will be in the detail
kerryunderwood
December 3, 2015 at 5:06 pm
What’s your take on the Legal Expenses Insurance game and whether clients who have a LEI policy are likely to benefit from their “costs” being paid by the LEI policy? Surely an “own goal” for the LEI insurers if they had to start actually paying own solicitor costs for once?
Lee Jones
December 2, 2015 at 9:39 am
LEI does not normally cover small claims for exactly the reason you have given! It is fast disappearing anyway as insurers are no longer able to sell claims legally to solicitors.
Kerry
kerryunderwood
December 3, 2015 at 5:04 pm
Will the changes apply to MIB claims I wonder
Mike Brown
December 2, 2015 at 1:00 pm
Don’t know.
kerryunderwood
December 3, 2015 at 4:55 pm
And what of QOCs now? I’m guessing if we’re now having to sign clients up on a contingency fee basis they will not only lose the protection of Part 36 offers but also QOCs…
Anne-Marie
December 2, 2015 at 2:15 pm
QOCS and Part 36 apply to matters funded by pre-issue contingency fee agreements in the same way as they apply to any other method of funding. However in the small claims track there are no recoverable costs either way, so QOCS has no relevance.
Likewise Part 36 does not apply to small claims. That cuts both ways- no extras for claimants who match Part 36 offers but no risk either from defendants’ offers and no need for after-the-event insurance.
Kerry
kerryunderwood
December 3, 2015 at 4:53 pm
Rumours abound of deals done at No 10 yesterday sealing the SCT rise to £5k and the ban on RTA whiplash and it is said a ban on credit hIre. Is this just the rumour mill or was there a meeting yesterday ?
dominicmoss
December 11, 2015 at 5:18 pm
The rise in the Small Claims limit has been announced to Parliament and published in the relevant Parliamentary papers, as has the proposal to scrap general damages in low-value soft tissue injuries – see Autumn Statement to the House of Commons by the Chancellor of the Exchequer and papers subsequently laid before Parliament.
Scrapping general damages requires an Act of Parliament and I understand a consultation will take place in the new year and a Bill laid before Parliament in this or the next session.
Raising the small claims limit does not require primary legislation and will go ahead in October 2016 or April 2017.
I do not know of any meeting yesterday but I think it is indeed likely that heavy restrictions will be placed on credit hire claims. Few could argue with that as it is perhaps the most abused aspect of personal injury work.
Kerry
kerryunderwood
December 11, 2015 at 5:27 pm
What I do not understand is everyone is saying CMC will move into the market. ( At the risk of sounding thick)
How will a CMC bank clients money/damages
How will they submitt a CNF through the portal?
Gavyn
December 14, 2015 at 3:16 pm
At present you need a SRA or ABS number to register for the portal. I wonder, Kerry, if they will amend application form to include a MOJ CMC number ? As for banking client’s money the PPI boys seem to manage. I was reading a web site for one of them last week and they state plainly that they put the money into their account and pay out the balance to the client. Whether this is in compliance with their regulations I do not know.
dominicmoss
December 14, 2015 at 4:09 pm
CMCX’s are already allowed to do all of this except access the portal – see DBA Regulations. Standard practice, certainly in my firm, to get the money and account to client for the balance due. Thought it was in every firm.
Kerry
kerryunderwood
December 14, 2015 at 5:05 pm
Un-named sources are now making vague statements (See lawgazette today) about the SCL going up April 2017 but I am afraid I don’t trust them.
dominicmoss
December 14, 2015 at 4:11 pm
The government has made no decision as to timing, so I fail to see how these people know. They don’t. Ignore them.
kerryunderwood
December 14, 2015 at 4:36 pm
Hi Kerry is there any further indication after the consultation in December, as to when the small claim limit will go up.
kit
January 18, 2016 at 2:55 pm
There has been no consultation. I understand that the likely implementation date is April 2017.
kerryunderwood
January 18, 2016 at 3:54 pm
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