PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL
On 17 November 2016 the Ministry of Justice published its consultation paper – Reforming the Soft Tissue Injury (‘Whiplash’) Claims Process – a disingenuous title as it proposes a five-fold increase in the small claims limit for personal injury cases of all kinds, not just whiplash and not just road traffic.
So if a spanner falls on your head at work this consultation covers that accident, which has nothing whatsoever to do with whiplash or motor insurance premiums.
It also covers credit hire claims and the possibility of a tariff system for injuries.
The consultation is open until 6 January 2017, that is 50 days, including Christmas and the New Year period.
Including the impact assessment, which for once is lengthy and important, it runs to nearly 200 pages.
I have given the link above and the paper can be accessed there and responded to there.
In view of the length and complexity of the consultation paper I am doing separate blogs in relation to each proposal and in this first one I deal with the small claims limit proposal.
Small Claims Limit
The consultation paper proposes increasing the small claims limit for all personal injury cases from £1,000.00 to “at least £5,000.00.” (Paragraph 66, 82 – my bold).
The Executive Summary refers to £5,000.00 but Part 4 – Raising the Small Claims Track Limit for Personal Injury Claims – (pages 24 – 30 of the report) refers to “at least £5,000.00” (paragraph 66, 82), “whether the increase should be to £5,000.00 or higher.” (Paragraph 87, 94) and paragraph 97 reads:-
“97. The level for the small claims limit for PI claims relates only to the PSLA element of the claim and not to the total value of the claim. Consistent with this, it is intended that the increase should apply only to the PSLA element of the claim. In considering the level of the increase, and to build in an element of future proofing, the government has considered whether the limit should be raised further, for example to £7,500 or even to £10,000, given that the limit for all other claims is £10,000. However, the government has decided that an increase to £5,000 is a proportionate response to the issues identified at this stage, and the accompanying impact assessment uses this figure. We would, however, welcome views from stakeholders on whether the small claims limit should be increased beyond £5,000, and, if so, to what level.”
Question 14 of the consultation, which follows paragraph 97 reads:-
“Question 14: The small claims track limit for personal injury claims has not been raised for 25 years. The limit will therefore be raised to include claims with a pain, suffering and loss of amenity element worth up to £5,000. We would, however, welcome views from stakeholders on whether, why and to what level the small claims limit for personal injury claims should be increased to beyond £5,000?”
The Government says that it is “not minded” to limit the small claims rise to RTA claims only (paragraph 93), although question 13 states:-
“Question 13: Should the small claims track limit be raised for all personal injury or limited to road traffic accident cases only?”
The Ministry of Justice state, correctly, that neither the issue of raising the personal injury small claims limit, nor the types of personal injury claim that such increase will apply to, require primary legislation, that is they can be dealt with by way of a statutory instrument amending the Civil Procedure Rules.
Paragraph 86 reads:-
“Increasing the small claims limit for PI claims does not require primary legislation and can be achieved through changes to the Civil Procedure Rules. Supporting changes will also be required to allow for the recoverability of the fixed cost of a MedCo accredited medical report by the claimant and to ensure that all claims are supported by such a medical report.”
This will involve a major change in the culture of the Small Claims Court where generally expert evidence is not allowed.
Overall the consultation paper is very confused and confusing as to whether litigants in an increased small claims limit will require assistance.
The general tone of the paper is that they do not and yet paragraph 103 reads:-
“The government is considering the issue of the potential for claims management companies (CMC) and paid McKenzie Friends21 to re-enter the PI market in response to these reforms in general, and the increase in the small claims limit in particular. These types of organisation can offer services to claimants whilst operating with lower overheads than many PI lawyers. During the last consultation on this issue, a CMC trade association wrote to the government to argue that this would happen if the small claims limit were increased. We are interested in respondents’ views in relation to whether or not this would be helpful in providing support to otherwise unrepresented litigants.”
Questions 15 and 16, grouped together in the consultation paper, read:-
“Question 15: Please provide your views on any suggested improvements that could be made to provide further help to litigants in person using the Small Claims Track.
Question 16: Do you think any specific measures should be put in place in relation to claims management companies and paid McKenzie Friends operating in the PI sector?
Please explain your reasons why.”
Thus the Government is specifically considering replacing lawyers in personal injury small claims with paid McKenzie Friends and with claims management companies.
How on earth that will reduce, rather than significantly increase, fraudulent claims is beyond me and the issue is not even raised in the consultation paper.
A reminder that the consultation closes on 6 January 2017 at 5.30pm.