Government says PI small claims limit rise ‘long overdue’

In an official response to an online petition, the government has said it is both ‘justifiable and proportionate’ to increase the personal injury small claims limit to £5,000.

The Chancellor George Osborne announced the proposed increase, along with the abolition on damages for ‘minor’ whiplash injuries, in his spending review towards the end of last year. It is likely that both measures will come into force in April 2017, subject to parliamentary scrutiny and ratification.

In defence of the proposal, the Government has pointed out that the current limit has remained at £1,000 for nearly 25 years and that it hadn’t kept up with current trends in the personal injury market.

It believes most ‘minor’ injury cases are “straightforward enough to be brought without the need for legal representation”, making them suitable for consideration in the small claims track, which deals with cases of limited value.

“Claimants are not precluded from engaging legal representation, but the small claims track is intended for cases which could be brought without lawyers,” said the response.

“However, the £1,000 limit for personal injury cases in the small claims track was set in 1991 and has not been changed for nearly 25 years, so a revision is long overdue.”

The government stressed that individuals who suffered serious injury would still continue to be entitled to compensation under the new rules.

A petition in protest of the proposed change has now passed 21,000 signatures as the personal injury sector starts to campaign against the changes. If they can secure more than 100,000 names on the petition then the issue will have to be debated in parliament.

The government plans to consult on the detail of the small claims limit rise, including whether it should include all personal injury claims, later this year.

The Government response added: “These reforms will end the cycle in which innocent car owners pay higher premiums to cover false or unnecessary claims by others and the government expects insurers to pass savings of £40-£50 per average motor insurance policy on to consumers.

If you are concerned about the potential impact arising from the changes to the claims limit for personal injury cases, please contact us.