Increasing the small claims limit for personal injury (PI) creates significant access to justice concerns, according to a new report from the Justice Committee.
The committee examined the impact of raising the PI small claims limit (using secondary legislation) from £1,000 to £2,000 and to £5,000 for Road Traffic Accidents (RTA) related PI claims, part of a package of government reforms. Other measures are contained in the Civil Liability Bill which is currently before Parliament.
The group concluded that it was “troubled by the absence of reliable data on insurance fraud” with regard to PI claims.
It recommended that the government work with the Association of British Insurers (ABI) to develop a more nuanced approach that avoids conflating unexpected consumer behaviour with fraudulent activity.
It also said the government should work with the ABI and the Prudential Regulation Authority or the Financial Conduct Authority to monitor the extent to which any reduction in insurance premiums can be attributed to these reforms, if they are implemented, and report back after 12 months.
Chair of the Justice Committee, Bob Neill MP, said: “Access to justice, including the right of access to the courts, is a cornerstone of the rule of law but these reforms risk putting that right in doubt. We share strong concerns that were raised during our inquiry on this issue, including concerns about the financial and procedural barriers that claimants might face.
“The Ministry of Justice has made some welcome moves to develop the electronic platform to compensate for claimants’ anticipated lack of legal representation. However, we remain to be convinced that this will be effective or sufficient.
“This is a vitally important point of principle on which the government should reflect. The small claims limit for personal injury should not be increased unless Ministers can explain how it will make sure that access to justice is not affected.”
The committee suggested that the £1,000 small claims limit should be increased to £1,500 which might be appropriate in April 2019.
However the group said the limit for RTA PI claims should not be increased to £5,000.
Andrew Twambley, spokesperson for Access to Justice (A2J) which is campaigning against the reforms, said: “The Justice Committee’s report is a clarion call to ministers to re-think their personal injury reforms.
“The report makes clear the reforms are poorly thought through, lack solid evidence and will punish genuine claimants.”