Reeves: Fraudulent claims argument is a smokescreen

Some 35 Labour MPs and one from Plaid Cymru have signed an early day motion in Parliament calling on the government to withdraw its planned increase in the small claims limit for personal injury.

While such motions have no formal impact, they signal the depth of feeling about an issue.

The motion was submitted by Ellie Reeves, who chairs the Parliamentary Labour Party backbench justice group.

She said a recent meeting held by the group with Labour’s justice team, Thompsons Solicitors and the union Usdaw demonstrated “the strength of opposition” to the reforms.

“We now need to win over support across the House to draw further attention to these damaging proposals,” she said.

The motion expresses concern at the planned increase and “regrets” that it is not on the face of the Civil Liability Bill and so “unable to be debated” in Parliament.

It supports the view of both the justice select committee and Lord Justice Jackson that there should only be an inflation-linked increase in the limit since it was last amended in 1999, which would take it to £1,500.

Earlier this week, the select committee asked the government again to justify the increases.

Writing on her website, Ms Reeves argued that the argument about fraudulent whiplash case “has been used as a smokescreen” to mask the “more insidious measure [of taking] away the right to free legal advice for hundreds of thousands of people injured at work or on the roads every year whose claims have nothing to do with whiplash”.

With around 40% of PI cases below the proposed £5,000 limit for road traffic accident claims and £2,000 for other PI cases, Ms Reeves said this would leave up to 500,000 people a year without the free legal cover they are entitled to: “I believe this is an active assault on our access to justice.”

She argued that it undermined “the longstanding legal principle that the guilty party pays”, and described the idea that people would have to represent themselves as “absurd”.

“The pain and trauma of an accident will make it extremely unlikely that the victim will then take on the further stress and burden of pursuing a claim without legal representation.

“This is backed up by a survey conducted by Unison which found that 63% of members surveyed stated that they ‘would not have proceeded or been at all confident to bring their claim without legal representation’.”

Ms Reeves said that, even if defendants were to pursue their case without representation, “the already overburdened civil court system would likely be unable to cope with the number of injured people attempting to run their own cases.

“Despite this, the government believes that 75% of cases will be run by injured people on their own, without legal support.”

More likely, she said, was the kind of collapse in claim numbers seen after fees were introduced for bringing employment tribunal cases.

It was, she said, the responsibility of the insurers themselves to combat fraudulent claims. “However, it would seem that instead of taking responsibility and resolving this themselves the insurance industry are in cahoots with the Tories to hit out against all injury victims, including those at work which whiplash has nothing to do with.”

Meanwhile, Lord Chancellor David Gauke yesterday expressed his pleasure at the latest report from the AA showed that car insurance premiums continued to fall in the second quarter of 2018, down 11% over the year to £648 – the second quarter of 2017 was the all-time high of £727.

Janet Connor, the AA’s insurance director, said blamed “the fast-growing whiplash claims epidemic”, plus higher car repair costs, for last year’s high, but said the prospect of the Civil Liability Bill – both the whiplash reforms and lower discount rate – has triggered a fall in premiums in the expectation that claims costs would fall.

“I think the outlook for drivers is positive, especially if the promised new legislation is effective in stemming the tide of spurious whiplash injury claims,” she said.

The Ministry of Justice took the unusual step of issuing a comment from Mr Gauke about the findings.

He said: “I am delighted car insurance premiums continue to fall, and that the AA recognises our crackdown on whiplash claims as a catalyst.

“Our reforms will ensure fairness for both motorists and claimants, and will see insurers pass down savings to their customers.

“Hard-pressed motorists will welcome this fall, for the second quarter running, leaving them with more cash in their pockets.”

The latest news on the reforms and their impact will be debated in detail at our PI Futures conference on 18 September in Liverpool. Click here for the programme and tickets.


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