The Association of British Insurers (ABI) has hit back angrily at yesterday’s justice select committee report criticising the government’s plan to raise the small claims limit , saying that it “read like a shopping list of asks from the claimant lawyers”.
Claimant lawyers, by contrast, have called on the Ministry of Justice to adopt the committee’s recommendations.
James Dalton, the ABI’s director of general insurance policy, said: “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.”
The committee specifically criticised the ABI’s data on fraud, and Mr Dalton responded: “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”.
Martin Milliner, director of claims at LV= General Insurance, said: “Indexing the small claims limit of £1,000 from 1999 is misplaced as it assumes that the world of ‘whiplash’ has been frozen in time.
“The pervasiveness of claims management companies, the cold-calling epidemic, alternative means to accessing justice and the industrialisation of the end-to-end value chain of a whiplash claim is irreconcilable to that of 1999.
“If the limit is not raised to £5,000, then the reforming nature of the bill will be put at risk, leaving those who are riding the whiplash gravy train still partying like it’s 1999.”
Brett Dixon, president of the Association of Personal Injury Lawyers, praised the committee’s report: “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.
“The weak evidence base for the government’s plans has been pulled apart throughout this inquiry. It must now give up its hell-bent attack on the genuine, honest, people who make claims for the pain and suffering caused by others.
“A government should put the people first. People have played second fiddle to big business for far too long.”
Simon Stanfield, chair of the Motor Accident Solicitors Society, added: “It’s difficult to see how the justice committee could have been more damning of the proposed increase. This report will make for very uncomfortable reading in the Ministry of Justice.
“Having considered the evidence, the justice committee has challenged the very foundations of the government’s proposed reforms, particularly concerning the overall impact on access to justice.
“The government – and the Commons and the Lords when considering the Civil Liability Bill – need to take this criticism on-board and, if there is still to be an increase, come back with a more reasonable and fairer proposal for motor accident victims.”
Andrew Twambley, spokesperson for the Access to Justice campaign group, said it was not too late “for Parliament to take note of this important report and urge ministers to change their direction of travel”.
He continued: “We have always maintained that some sensible further reform is necessary, but the government is firing at the wrong targets, and genuinely injured people will lose their rights as a result.
“We urge ministers to sponsor new talks between claimants and defendants to find an alternative approach to the current proposals.”
Law Society deputy vice-president Simon Davis said: “It is a mistake to equate the value of a case with its complexity and to conclude that representation in so called ‘small claims’ cases is not needed. We are pleased the committee clearly recognises and shares the Law Society’s concerns.
“These reforms will deny people legal representation. Without legal representation claimants will end up either not bringing claims or have no choice but to go it alone. This will deny justice to thousands.”
Vidisha Joshi, managing partner of London law firm Hodge Jones & Allen, said: “At last a glimmer of hope for innocent personal injury victims. This is hopefully an indication that the government will get a justifiable grilling when the Civil Liability Bill reaches the House of Commons.
“The government needs to study this report and act in the best interests of access to justice, not in the best interests of insurers, as it has done to date.”
Stephen Cavalier, chief executive of Thompsons, said: “The committee’s recommendations add serious weight to the many voices worried about the government’s desire to make fundamental changes built on such a feeble evidence base…
“If the words of the prime minister on the steps of Downing Street in July 2016, that when her government makes ‘the big calls’ they would think ‘not of the powerful’, and listen ‘not to the mighty’, are to mean anything at all, then now is a time for ministers to seriously reassess ploughing-ahead with changes, the whole basis of which has been so unequivocally called into question…
“If the government went ahead with proposals in their current form, we would have the farcical situation where, given the Scottish government’s 2014 decision to exclude all personal injury claims from the Scottish equivalent of the small claims track, an English worker, perhaps an HGV driver or staff on a train injured in the Borders in Scotland, would have free legal representation and get proper compensation for their injuries whilst, had the same accident occurs 10 miles south, they would not.”
Michael Warren, managing director of Minster Law, said: “We are pleased that the committee has underlined our call for vulnerable road users, such as motorcyclists and pedestrians, to be removed from the scope of the reforms altogether.
“The committee has made clear that access to justice is under threat. This report is a timely reminder to Parliament to urge ministers to rethink their entire strategy and come up with measures that meet the public need, namely a ban on cold calling and making sure injured people have the means they need to gain redress for their injuries.”
Qamar Anwar, managing director of marketing collective First4Lawyers, said: “Before we hang out the bunting, there are still further elements to the bill that need addressing. We struggle to understand why no serious review of the impact of LASPO has been undertaken.
“If it had, surely it would highlight that last year recorded the lowest number of claims registered at the Claims Recovery Unit in over a decade. My question is now: when will the government sit up and take notice?”
Finally, a Bar Council spokeswoman said: “There is insufficient evidence to suggest that these reforms are a proportionate response to the issue of fraudulent claims.
“A small claims limit of this size offends the principle of equal treatment under the law as it creates a different system of justice for a particular category of victim.
“An increase in the small claims limit for personal injury to £1,500 in line with inflation would be a more reasonable and proportionate measure.”