The small claims limit will rise to £5,000 for whiplash cases, but only £2,000 for other personal injury (PI) claims, the Ministry of Justice (MoJ) announced today in a bid “to crack down on the compensation culture epidemic” – less than seven weeks after its consultation closed.
There will be a fixed tariff to cap whiplash compensation pay-outs – see the full details here – which the MoJ said would make sure that “payments are proportionate to the level of injury suffered”.
The other option consulted on was no compensation for an injury lasting less than six months.
It will also press ahead with banning offers to settle whiplash claims without medical evidence.
The provisions are included in the Prisons and Courts Bill unveiled today by Lord Chancellor Liz Truss, the main thrust of which is on “the biggest overhaul of prisons in a generation”, along with modernising the courts.
The shift to differentiate between whiplash and other PI claims represents something of a victory for campaigners who focused on the harmful impact a £5,000 limit would have on those injured in the workplace in particular – notably trade union law firm Thompsons, which harnessed support from the Labour Party.
Changing the small claims limit can be done by statutory instrument, rather than needing primary legislation, but all the changes will be introduced together on 1 October 2018.
Among the court modernisation changes will be greater use of virtual hearings in criminal cases, and the MoJ said it would put booths in court buildings to allow the public to view virtual hearings as they take place from anywhere in England and Wales. Court listings and case results will be published online.
As announced earlier this month, offenders charged with some less serious criminal offences, such as failure to produce a ticket for travel on a train, will be able to plead guilty online, accept a conviction, be issued a penalty and pay that penalty there and then.
The MoJ added: “Businesses will be able to recover money much more easily, with digital services that allow them to issue and pursue their cases quickly. This will give them vital confidence to do business here, and will enable our world leading justice system to remain the destination of choice for dispute resolution.”
Case officers will in future handle routine tasks to free up judges and magistrates, and there will be more flexible deployment of judges.
Justice minister Sir Oliver Heald said: “Britain has the best justice system in the world, but it should also be the most modern, because we have a vision for a justice system that truly works for everyone. Victims and the most vulnerable are at the centre of our changes, which will help deliver swifter and more certain justice for all.
“We want courts that are efficient and fit-for-purpose, with facilities across the entire estate that are modern, user-friendly, and work in favour of our hard-working and dedicated judges and magistrates.
“The Prisons and Courts Bill underpins this vision – building on the good progress we have already made in improving the experience of all users and cementing our reputation for global legal excellence so we can go on attracting business to the United Kingdom.”
The initial reactions from those in the claimant camp was not positive. The Association of Personal Injury Lawyers said it was “deluded” to believe that insurance premiums would fall as a result of removing “fair compensation”, lawyers said in response to Government proposals for personal injury.
“Expensive motor repairs and repeated hikes in insurance premium tax are both major factors in the cost of motor premiums, yet the government is fanatical about supressing the right to claim for legitimate injuries instead,” said president Neil Sugarman said.
He added that forcing more claims into the small claims court system meant nuisance calls and texts about personal injury claims would reach “epidemic proportions”.
Vidisha Joshi, managing partner and head of PI at London firm Hodge Jones & Allen, said: “Once again, people injured as a result of someone else’s negligence will suffer. The legitimate injury of whiplash is being use by the insurance industry for their own advantage.
“They claim insurance premiums will fall as a result of a fixed tariff – we know from past experience premiums do not fall. It will once again be individuals in our society who pay the price, with the growing profits going straight to shareholders.”
Qamar Anwar, managing director of marketing collective First4Lawyers, said: “In rushing through its response to the PI reforms, it is clear that the government and insurance sector value the damage caused to vehicles more than they do to humans.
“It is clear that the consultation – which only closed on 6 January – simply paid lip service to a decision that was already made by the government in cahoots with the insurers behind closed doors. We are shocked at the government’s lack of concern for innocent victims of road traffic accidents…
“We are always talking about the need to stamp out rogue claims management companies. Unfortunately, this move will lead to the ‘PPI-ification’ of road traffic accidents. Far from helping improve the perception of fraudulent claims, it will simply drive up complaints and potential fraud.”