Small Claims limit will not be increased

The Ministry of Justice (MOJ) has published its’ response to a consultation on reducing the number and costs of whiplash claims. Following concerns raised by the House of Commons Transport Select Committee, the MOJ has announced that the small claims limit for personal injury cases will not be increased from £1,000 to £5,000.
 
The MOJ says that we are starting to see the impact of the recent reforms and motor insurance premiums are beginning to fall, and Justice Secretary Chris Grayling announced that insurance premiums have come down by an average of £80. The MOJ maintains there are ‘good arguments for increasing the small claims track to £5,000 for all road traffic accident to raise incentives to challenge fraudulent or exaggerated insurance claims’ but they accept the Committee’s concerns that the increase may deter access to justice for the genuinely injured.
 
However, the MOJ is proceeding to introduce further measures aimed at cutting the cost of motoring and reducing the number of exaggerated and fraudulent claims. The measures include the creation of independent medical panels for diagnosing whiplash and other soft tissue injuries. The panels will be backed by an accreditation scheme ‘to establish a new more robust system of reporting and scrutiny’ and it is thought this will challenge exaggerated and fraudulent whiplash claims ‘whilst ensuring that the genuinely injured, backed up by good quality medical evidence, can get the help and compensation they deserve’. Complementing this measure is the government’s intention to encourage insurers to end the practice of making offers to settle without requiring medical report. However, at the time of writing the government has not introduced measures to end this practice.
 
Justice Secretary Chris Grayling has refused to rule out raising the small claims limit in future but we should determine the impact of the recent reforms on the motor insurance premiums before implementing further change. The MOJ has also acknowledged that if the small claims threshold is increased they will need ‘to ensure that adequate safeguards are developed to protect genuine claimants from any detrimental effects relating to access to justice or to the under-settling of claims’.
 
You can read the MOJ’s response in full at https://consult.justice.gov.uk/digital-communications/reducing-number-cost-whiplash/results/whiplash-response.pdf.