As part of the Government’s Spending Review and Autumn Statement to the House of Commons, it was announced last week that the upper limit for personal injury claims in the Small Claims Court will be increased from £1,000 to £5,000.
This arguably controversial move, which is in part a way to make it more difficult for people to claim compensation for exaggerated or fraudulent whiplash claims, and is announced alongside the Government’s plans to prohibit courts from awarding general damages for pain, suffering and loss of amenity in minor soft tissue injuries (including whiplash claims, which form eight out of 10 personal injury claims following road traffic accidents, according to the Association of British Insurers). Claimants will still be entitled to claim for “special damages” including treatment for any injury and any loss of earnings. On 18 November 2015 the Justice Minister Caroline Dinenage also suggested that the limitation period for making a whiplash claim, which currently stands at three years, may be reviewed, something that will be included in the Insurance Fraud Taskforce Report due out in December this year.
As a result of these changes the Chancellor estimated that annual insurance costs for drivers could fall by between £40 to £50 per year. However, they are likely to put further strain on the court system if the many thousands of road traffic accident claims which currently fall within £1,000 to £5,000 are now dealt with in the Small Claims Court, and may render almost obsolete the Ministry of Justice personal injury Claims Portal which has been expensive for the Government to establish.