Access (to Justice) Denied!

 

The Government’s spending review in November 2015 saw George Osborne announce a rise in the small claims limit for personal injury cases from £1,000 to £5,000.

Currently in the small claims court, each party pays their own legal costs, regardless of outcome. A successful claimant cannot recover any solicitor costs from the defendant if their claim falls within the limit set at £1,000. If your compensation is worth more than £1,000, you can instruct a solicitor to represent you in your claim; advise you of its merits and its value; arrange medical expert appointments and reports; seek funding for any necessary private medical treatment required; negotiate with the defendant’s insurer or solicitor; and, most importantly, fight your corner. The majority of your solicitor’s costs will be met by the other side if you win, with a limited deduction from compensation being made for the balance.

It is estimated that more than 90% of personal injury claims will fall below the newly proposed £5,000 limit, preventing the vast majority of injured claimants accessing independent legal representation without facing significant deductions from their compensation to cover their solicitor’s costs.

In other words, thousands of people injured through someone else’s negligence, will be unable to claim the cost of legal help to recover compensation. Claimants will be left at the mercy of the insurance industry, which aims to keep compensation payments to a minimum to increase profits for the benefit of its shareholders. People will either have to accept what the insurers offer them (we regularly recover over 100% more than the insurer’s first direct offer) or represent themselves in Court and fight the insurer and its legal team for fair compensation.

Furthermore, the Government has announced that all claims for whiplash caused by a negligent defendant will be banned.  So the solution to eradicating a minority of fraudulent claims (bearing in mind that over 98% of whiplash claims are paid out by insurers) is to ban ALL such claims.  Carrying this logic forwards, perhaps the public should be banned from making any insurance claims whatsoever (household, payment protection, vehicle damage, travel etc) in order to make sure that the minority of fraudsters can’t operate.  The legal requirement for insurance could then be abolished and no one would need any cover! Makes perfect sense 😉

The Chancellor has declared that this will crackdown on motor-insurance fraud, meaning savings are passed onto the consumer.

To eradicate fraud, I believe the Government should first:

• Ban insurers from regularly making settlement offers before medical evidence is produced. This tells anyone involved in an accident that they can recover compensation without proving that they have been injured!

• Ban cold calling by insurers. Most instances of people being harassed about making claims stem from the insurers themselves! Independent law firms of course have no access to such information.

These latest reforms will not put off someone willing to fraudulently make a claim. The changes and similar reforms in 2013 are the result of numerous meetings at Downing Street where only representatives from the insurance sector have been invited. The Government has rejected calls by claimant lawyers to allow representatives on both sides attend.

To explain the practical effect, if you suffer a fractured ankle due to someone else’s negligence and take a year to recover, with months off work, there is a very significant risk that you will have take the insurer to Court by yourself to recover compensation, if you are not prepared to accept the insurer’s offer (assuming that they offer to pay you anything!).

This will lead to a reduction in (a) the amount of claims made and (b) the compensation recovered by genuine and successful claimants in those claims that are made. Furthermore, a reduction in the amount of successful claims, will mean that defendant insurers pay out less in refunds to the Government for NHS charges for treatment and DWP benefits provided to the injured claimant as a result of the injury caused by the defendant.

The Effects:

  • The public will lose out as they will no longer be able to claim compensation for whiplash caused by another driver’s negligent driver.
  • The public will lose out as they will be unable to recover legal costs in around 90% of cases.
  • The public will lose out as they will find it harder to find legal representation to make a claim.
  • The public will lose out as they will recover less compensation in those claims that are made without legal representation.
  • The NHS will lose out as it will recover less in refunds to treatment provided to claimants injured by defendant negligence.
  • The DWP will lose out as it will recover less in refunds for benefits paid out to claimants injured by defendant negligence.
  • The INSURERS WIN. They will pay an estimated £100 million less in compensation and millions less in legal costs. In return they promise to reduce insurance premiums but this was promised following the cuts made in 2012 but premiums continued to increase. The Government has also said that it has no intention of monitoring whether or not insurers actually reduce premiums despite that being the apparent entire intention of these latest reforms.

But, hey, at least ‘we are all in it together’.

As a solicitor specialising in PI, I will continue to ensure, wherever possible, that you recover maximum damages to compensate you fairly for your suffering and losses. I will still be here to help fight your corner but be aware that, from 2017, it is very likely that the negligent defendant’s insurer will no longer have to pay your legal costs in the majority of cases. They will be capped and deducted from your compensation.

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