Late last year, as part of his Autumn Spending Review, the Chancellor made some surprise announcements in relation to personal injury claims that will see big changes for solicitors and claimants alike. In a continued attempt to reform this area law, under the guise of tackling ‘bogus’ claims and therefore reducing the cost of car insurance, Mr Osborne’s announcements have been met with widespread comment from those in our industry.
The proposals would see compensation for ‘mild’ whiplash claims banned altogether, with further changes that will effect obtaining legal advice. Below, we go into the proposals in further detail, and outline what they will mean for those wanting to pursue compensation claims.
No more damages for whiplash claims
Currently, there are certain guidelines on the amount that can be claimed following a road traffic accident. Depending on the severity of the injury, ‘general damages’ for whiplash usually amount to a figure between £500 and £3000.
Under the new proposals, victims of road traffic accidents would no longer be able to claim these damages for pain and suffering – able only to claim for any costs arising from the accident, or else loss of earnings.
Changes to the claims limit
Perhaps the more controversial element of the plans is the proposed increase in the ‘small claims limit’ to £5,000. Currently, for claims valued at over £1,000, you can instruct a solicitor to represent you on a no win no fee basis. If your solicitor wins the case, they can recover their costs from the other side – effectively meaning most people can obtain legal advice and therefore gain access to justice. Raising the small claims limit to £5,000 means that due to the way courts work, anybody with a claim valued at less than this will no longer be able to recover legal costs.
Given that the vast majority of personal injury claims, particularly following road traffic accidents, fall into the sub-£5,000 bracket, raising the small claims limit will force people to fund personal injury lawyers on a private paying basis, or else attempt to pursue a claim through the courts themselves.
Should the latter option be elected, this creates a problem in itself. The nature of road accident claims means that when making a claim, you will be up against a large insurance company. These companies of course have vast budgets for legal representation and employ solicitors, and when required barristers, to represent them in cases. This would therefore leave claimants, who in most cases would be unable to afford legal representation under the new rules, at an unfair disadvantage.
As outlined above, the proposals will no doubt restrict access to justice should they go ahead. Although no set timeline has been put in place as yet, it would seem likely that changes will be made sooner rather than later. Therefore, if you have been involved in a road traffic incident and suffered an injury, it would be advisable to seek legal help sooner rather than later.