The Justice Select Committee has criticised the upcoming increases in the small claims limit for personal injury and road traffic accident claims.
Chair Bob Neill MP said the committee shares “strong concerns” that the increases, from £1,000 to £2,000 for personal injury and to £5,000 for road traffic accident claims, will impede access to justice.
The small claims limit increases form part of the whiplash reform package that the government is pursuing to clamp down on the so-called ‘compensation culture’. They are separate from the Civil Liability Bill and will be brought in via secondary legislation.
The Justice Select Committee is concerned that the Ministry of Justice’s (MoJ) electronic platform could fall short of creating a claims process that guarantees “unimpeded access to the courts”—a principle confirmed by the Supreme Court in a recent case.
Neill said: “Access to justice, including the right of access to the courts, is a cornerstone of the rule of law but these reforms risk putting that right in doubt. We share strong concerns that were raised during our inquiry on this issue, including concerns about the financial and procedural barriers that claimants might face.”
“The Ministry of Justice has made some welcome moves to develop the electronic platform to compensate for claimants’ anticipated lack of legal representation. However, we remain to be convinced that this will be effective or sufficient. This is a vitally important point of principle on which the Government should reflect.”
“The small claims limit for personal injury should not be increased unless ministers can explain how it will make sure that access to justice is not affected.”
In a letter to peers ahead of the Civil Liability Bill entering the committee stage in the House of Lords, MoJ spokesperson Lord Keen doubled down on ministers’ view that claimants using the small claims court may not necessarily require legal representation, and said that those who wish to “seek some other form of help or representation” will benefit from a competitive and adaptable legal sector.
Michael Warren, managing director of Minster Law, commented: “The committee’s conclusions are a powerful endorsement of our view that the government’s personal injury reform agenda is poorly thought through.”
“The MPs are especially concerned about the impact on claimants, and we have said all through that the government’s first priority is to guarantee that genuinely injured people are properly served by the justice system.”
Association of Personal Injury Lawyers president Brett Dixon said: “Finally, someone has taken notice of the needs and vulnerability of injured people. To those of us working with injured people every day it has always been obvious that it is callous to force an injured claimant to go up against an experienced defendant and either shoulder the costs, or go without.”
“This is what we’ve said to the government time and time again. It must respect the committee’s conclusions about upholding access to justice.”
James Dalton, director of general insurance policy at the Association of British Insurers, dismissed the Justice Select Committee’s conclusions. He said: “The conclusions in today’s Justice Select Committee report on the Small Claims Track (SCT) limit read like a shopping list of asks from the claimant lawyers.”
“If accepted, these recommendations would achieve absolutely nothing in terms of reducing the number and cost of whiplash-style claims, would allow lawyers to continue to line their pockets and honest motorists would continue to pay higher car insurance premiums as a result. In addition to every £1 paid in compensation to claimants, claimant lawyers get nearly 50p.”
“Access to the justice system is important and the fact remains that under the Civil Liability Bill, compensation for whiplash claims will be fixed and a portal is being developed to facilitate access for people to make a claim with the support and guidance they need to do so.”
“We remain confident that our data provides a reliable and transparent indication of the levels of claims fraud detected by insurers and we are happy to work with government and other stakeholders on this issue.”