The Government’s proposal to increase the current small claims limit from £1,000 to £5,000 will reduce many people’s access to legal representation resulting in negative consequences.
Announced in the Autumn Statement, the proposals have been rightly criticised by the Law Society. Its president Robert Bourns said that they ‘will completely undermine the right of ordinary people to receive full and proper compensation from those that have injured them – often seriously – through negligence’.
The small claims limit is there to ensure that a person who has suffered harm by way of a negligent act or omission which is of low value and seen as straight forward, can progress a claim in the county court themselves and at a relatively low cost.
If the small claims limit is increased, fewer people will be able to bring a claim as they will have no access to legal representation. This means that those who have suffered harm because of negligence from a road traffic accident, the medical profession or via employer’s/occupier’s liability are unlikely to be entitled to claim their legal advice costs from the offending party. As a result, people will be forced to issue their own claims and run their own cases, or be forced to pay a significant amount for qualified legal advice.
Currently UK solicitors can provide these services via a conditional fee agreement, which means that the payment to legal representatives is only payable if the injured person is successful in their claim. If the claims limit is increased, this arrangement will not be available to those whose damages are valued at £5,000 or less, but others may be affected too. For example, if a claimant’s injury value is placed at £4,500 with say £3,000 of loss of earnings, it’s likely that this individual would also have to manage this claim themselves or pay out of their own pocket for solicitors.
Litigation can be a stressful process and solicitors are there to try to cushion their clients from the demands of the Court and from the other side. Solicitors are qualified and trained to deal with the stresses of Court actions and understand the tactics used by those at fault to try and reduce the level of awards made. With the limit increase, those issuing their own small claim will need to liaise directly with the court and the other side. In many cases, it is likely that the offending party will have insurance and access to legal representatives, so people with no legal representation will have to speak directly with experienced solicitors on the other side.
People who have a claim for damages and who have often already suffered both physically and emotionally, will then need to take on the burden of running what could potentially be a very complicated claim to receive any compensation for their losses.
Furthermore, the changes will only serve to generate bigger profits for the insurance industry. Any reduction in premiums is likely to be small or non-existent and the insurance companies have failed to say that these savings will be passed onto customers.
The Government’s proposals are in the consultation process, however this is moving faster than expected with the consultation due to end in January 2017.
The Labour party have pledged to oppose any such proposals, but there has been minimal press rhetoric which highlights the problems ordinary people will face if this proposal is passed. It is vital that the public is provided with accurate information and statistics and that the legal sector works together to agree an approach protects the interest of all genuine claimants.
For further information, please contact Rachel Jones, a trainee solicitor in our clinical and medical negligence team at Devonshires.
