Posted 26 February 2016 by Donna Scully
The government are due to consult on the proposal to raise the small claims limit this year. What are the potential ramifications for your section of the market if this if the increase is made
I think a better starting point for this question is not about our 'market' but to consider injured accident victims who are forced to take out compulsory motor insurance. The proposed reforms will deal a devastating blow to them in my opinion. Only 'after' they pay their insurance and find themselves needing to make a genuine claim will they find out they have to do it on their own with no expert legal advice and assistance. Their opponent on the other hand will have skilled, expert advice and assistance if the matter goes to court.
In the ordinary course of life when you have a problem, such as your boiler breaking down, you are not expected to fix it yourself assisted by a manual, but you will automatically call an 'expert' to fix it. It is simply not fair or just that when you have a legal problem, the system actively prevents you from seeking expert advice. In my view, the process is too complicated for the small claims track as a litigant in person. I have made the suggestion that a member of the ABI, the government, or a non-RTA lawyer should run a so called 'straight-forward' RTA case themselves and see how they fare. I genuinely think that this would be the only way that they would see the complexities that are involved. There can, even in low value cases, be difficult issues relating to liability, causation and medical evidence.
A proposed "five-fold' increase to the small claims limit is enormous and the level of injury you are talking about at £5,000 is deeply concerning. As usual, I fear the reforms will hit the most vulnerable in society, those who may not have the ability or the confidence to seek their redress in court on their own.
I suspect, in terms of our industry, victims will continue to desperately seek representation when they need it most and be prepared to pay for it out of their damages so the market will continue. My genuine fear is whether these people will get the 'right' professional representation or will unscrupulous people see these reforms as a way to make money. I also have concerns that the number of claims might actually increase - and the levels of fraud too. Now that would be a tragedy for everybody. I sincerely hope that the forthcoming consultation is a genuine one and that real concerns about the 'unintended consequences' the reforms could bring are listened to.