Editor Neil Rose of Legal Futures, the move to increase the small claims court’s limit from £1000 to £5000 to address minor soft tissue motor accident injuries gives the advantage to insurers alone. This would enable them to settle cases off-court in a lump-sum repayment.
Law Society President Jonathan Smithers said victims will be forced to go through the small claims court without legal advice, giving insurers that could have legal consultation and representation with their resources the upper hand.
Meanwhile, insurers said to handle the large queue of personal injury claims, contesting them with legal representation would increase its £2bn loss yearly for fraudulent and exaggerated personal injury claims.
The proposals come after Chancellor George Osborne announced his plan to revolutionise the UK’s compensation culture. Senior EAD Partner Steve Cornforth said the Chancellor is fighting a “mythical” compensation culture that “the media and insurance companies created to alarm us all without substantial evidence of its existence.”
The Select Transport Committee had criticised the Chancellor’s Spending Review as it downplayed the role of victims. The STC said the Chancellor’s consultation were only with insurers.
Whiplash injuries, including injuries with facial scarring, will face a cap of £5000. Observers and analysts said this would only be “throwing the problem into the long grass”. A guaranteed solution cannot be ensured by the move, they said.