In the Chancellor's Autumn Statement, George Osborne announced that the government intends to increase the small claims limit for personal injury claims from £1,000 to £5,000. The details of how this proposal will be implemented are still awaited.
The £5,000 limit applies to general damages and not to the overall value of the claim. General damages are the compensation which is awarded to Claimants because of the pain and suffering which they have experienced, rather than compensation for specific financial losses such as loss of earnings. The amount awarded for general damages is not always very large and if the limit is increased it could mean that people with quite significant injuries are forced to represent themselves in order to obtain compensation.
The context of this decision is that the government is seeking to reduce the cost of whiplash claims, but it is not clear whether the change would apply to road traffic accidents, whiplash claims, or all claims. If it is decided that the increase applies to all personal injury claims then it will also affect people who have suffered as a result of medical negligence and, worryingly, may lead to fewer people being able to access legal services in order to bring a claim.
Jonathan Wheeler, the president of the Association of Personal Injury Lawyers (APIL), has commented upon the proposals and notes that there are no adequate safeguards to protect genuine claimants.
'Only two years ago the government ruled out increasing the small claims court limit because there were no adequate safeguards to protect genuine claimants. There are still no adequate safeguards.' Wheeler argued that raising the small claims limit would lead to an 'epidemic of cold calling' from claims management companies rushing to take advantage of vulnerable people unable to afford legal representation. 'We need to remember that these are people who have been needlessly injured by the negligence of others,' he added.