In his Autumn Statement at the end of November, Chancellor George Osbourne shocked the legal world with his recommendations in the world of personal injury. The Chancellor proposed a ban on claiming general damages for “minor” soft-tissue injuries and an
increase in the small claims limit for all personal injury claims to £5,000. The ban would be effective from April 2007 with the changes to the small claims limit possibly coming in even earlier. As well as looking to reduce fraudulent claims, the apparent motivation for the proposals is that the Chancellor believes that it will save £1 billion for the insurance industry. It is claimed that the insurance industry will then pass this on to its customers by way of reduced insurance premiums.
The Proposed Ban
This would be on claiming for general damages for “minor” soft-tissue injuries. General damages are defined as compensation for pain, suffering and loss of amenity. This is likely to cover a significant amount of whiplash type claims, meaning that in such circumstances an injured claimant could only pursue a claim for special damages such as loss of earnings, medical expenses etc.
The increase in the small claims limit
Currently personal injury claims with a value of £1,000 or less for general damages are dealt within the small claims section of the County Court where there is usually a no costs rule. Hence the vast majority of claimants in such cases act without legal representation or help since the costs of such legal representation is usually not recoverable from the defendant (usually the insurer) . The Government proposes to increase the small claims limit here to £5,000, so that now even more claimants will find it harder to pursue their legal right as they will not be able to afford legal representation as there will be little prospect of recovering the costs of such representation from the defendant insurer.
Daven Naghen head of our firm’s Personal Injury department and a member of the Association of Personal Injury Lawyers (APIL) has commented as follows:-
“These proposals are so unfair. Many injured motorists will lose their right to claim compensation for their injuries and many other will have their right to make such a claim limited by the fact that they will have to go to the Small Claims Court without legal representation and face a defendant insurer who will have the benefit of full legal representation and advice.
And seriously will the Insurers pass on any savings to us all by reducing our insurance premiums? I seem to remember that the same promises were being made about 3 years ago when the Government decided that success fees should no longer be recoverable from defendants, but I personally have seen no real evidence of any decrease in insurance premiums – everyone I know says that their premiums continue to rise!
APIL will do what it can to oppose the proposed measures and I will support them as best I can.”
If you have been injured in a road traffic accident and need advice about bringing a claim for your injuries and losses then please contact Daven Naghen on 01775 722261 or email email@example.com or visit our offices or make an appointment at our offices at 23 New Road, Spalding, Lincolnshire, PE11 1DH. We do offer free initial interviews when Dav is able to evaluate the merits of your claim, its possible value and whether it can be funded by some form of no win no fee agreement.