Justice Secretary confirms that small claims limit will rise to £5,000 for RTA and £2,000 for other PI cases

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Justice Secretary David Lidington has confirmed that the small claims limit in road traffic accidents (RTA) will rise to £5,000, while the limit for other personal injury claims will be £2,000.

Lidington could not, however, tell the Justice Select Committee when the new limits would be set. He repeated the Government’s long-standing message that the limit for RTA cases had to rise to tackle the number of whiplash claims in the UK, which he said were not comparable with other “advanced countries” and were leading to higher motor premiums for policyholders.

“I would argue these are not cases where it ought normally to be necessary to have legal representation,” said Lidington.

“These are not too dissimilar to an insurance claim of some kind. You have a fixed tariff available and if you have the evidence to show you are a victim it is fairly straightforward.”

Qamar Anwar, managing director of First4Lawyers, said that the confirmation from Lidington was “another blow for access to justice”.

“The unfairness inherent in these rises is staggering and does nothing to prevent fraud,” he said.

“For most people, a claim worth £5,000 is not low value. Further, it is estimated that 96% of road traffic accident related personal injury claims are under £5,000 so the impact could be huge. The reality is that innocent accident victims will be left unrepresented to deal with the insurer’s lawyers, making under-settlements inevitable.

Anwar also said that Liddington was quite wrong to claim that increasing the small claims limits for non-RTA cases to £2,000 would still make it “perfectly possible” for people to claim for industrial injuries.

“The majority of employers’ liability cases will still be captured by the change and will lead to a situation where genuine claimants will fear making a claim, especially against an employer, without the support of legal advice and counsel,”he said.

“Ask any injury victim, solicitors add much value to the process of managing compensation claims by not only funding aspects of the case, obtaining medical reports and other documentation, but also acting as gatekeepers in identifying and preventing fraudulent and exaggerated claims entering the system in the first place.

“Unfortunately, the government’s allegiances seem to rest with the insurers, not innocent accident victims. We’ll be redoubling our efforts to oppose these changes.”

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk