Personal injury claim changes: 1 million could lose right to affordable legal advice

6 January 2017

PCS has raised concerns that if the government's proposal to increase the small claims limit goes ahead nearly one million people injured anywhere, including at work, will lose their right to free or affordable, independent legal advice.

In responding to the consultation on arrangements concerning personal injury claims in England and Wales which includes a proposal that the small claims limit should be increased from £1,000 to £5,000 for all personal injury claims in England and Wales, we have raised our concerns about the impact on our members of raising the small claims track limit for all personal injury claims.

We view the proposals, which the government says are an attempt to clamp down on perceived fraud in whiplash claims, as not only another severe restriction to citizens’ access to justice, but also as the latest attack on trade unions and workers' rights. Our solicitors inform us that cases recovering under £5,000 for pain/suffering account for more than 70% of our union’s total personal injury cases referred to them in England and Wales.

Sinister attempt

Behind the claims that car insurance premiums will be reduced due to restricting bogus whiplash claims, is a sinister attempt to impose a baseless 500% increase to the small claims limit for all personal injury claims, whether they occur on the road, in the workplace, or anywhere else.

If all claims up to £5,000 were to be heard through the small claims route then the injured worker would have to choose between not taking a claim, taking a claim without representation, or employing a solicitor in the knowledge that the costs would leave them with very little or may even exceed any compensation they get. Unions representing large numbers of low paid workers estimate this could affect up to 80% of claims.

The reforms being proposed do the reverse of prime minister Theresa May’s promise to support “just about managing” families. They will only serve to further line the pockets of already highly profitable insurers and their grossly overpaid chief executives - Direct Line’s chief executive Paul Geddes received £4.82 million in 2015 and Aviva’s chief executive Mark Wilson £5.67m - while costing the taxpayer £135m a year. If the proposals are allowed to go ahead, they will make it much more difficult for workers to get the money they are entitled to when their employer’s negligence injures them or makes them ill.

Harder for workers

PCS is concerned that the government is using the perceived need to tackle fraudulent ‘whiplash’ claims as a cover for reducing access to justice for all personal injury claims. If the proposals are allowed to go ahead, they will make it much more difficult for workers to get the money they are entitled to when their employer’s negligence injures them or makes them ill.

This is likely to have a wider economic impact, both on employers and on the benefits system.

Employers currently use such claims to supplement their own loss of earning claims.

The impact on the benefits system will be twofold. Benefit claimants who are unable to work and then recover lost earnings because of a personal injury or illness caused by an employer’s negligence, would repay those benefits once their compensation payment is received. If more people are not receiving compensation because of the lack of legal support, these repayments will not be made.

There is also likely to be a greater need for benefits, if individuals are unable to work and unable to seek losses through such recovery, because the loss of earning elements will not be what determines whether the claim falls into the small claims area, as it is only based on the level of compensation for pain and suffering.
 
Support the campaign against the proposals by signing the online petition.

Find out more at Thompsons Solicitors’ Small Claims, Big Impact campaign page.

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