Government Back Off Small Claims Reforms: What Does This Mean For Consumers?

In his statement in December 2015, Chancellor George Osborne announced changes to the regulations governing small claims that included specific changes to personal injury claims. This was to introduce a ‘user pays’ function which means a charge would be levied against a claimant’s lawyer at the beginning of a claims process. This has now been put on hold whilst the government consults further on certain issues appertaining to small personal injury claims.

What Constitutes a Small Claim?

Full-blown litigation can be a costly and time-consuming affair with costs mounting up out of all proportion sometimes to the amount claimed. So the small claims court was set up specifically to deal with issues which are considered minor in terms of how much money is claimed although of course, not in terms of how important it is to a claimant.

The most common types of small claims concern things like compensation requests for faulty goods or services, landlord/tenant disputes or for wages or other monies owed. Time limits can be variable depending on the type of claim so take advice from an experienced solicitor on this. The limit for a small claim was raised to £10,000 on the 1^st April 2013 and in his spending review of December 2015, the Chancellor considered then decided against raising the personal injury level from £1000 to £5000.

Power in the Hands of the Consumer

The Chancellor has justified his decision to leave the personal injury claim threshold at £1000 by saying that this would save costs for insurers who would then pass on these savings to their customers. More importantly, we believe that by not raising the threshold a personal injury claimant is protected through having access to lawyers such as Concept Law Solicitors who are experts in the field of personal injury claims. By raising the threshold to £5000 a claimant would be subject to quite punitive costs in order to bring their claim to the small claims courts. This could mean either sacrificing part of their compensation award in order to pay the costs, or even not bringing the claim at all and losing out altogether. Equally disastrous would be the possibility of a claim being undervalued or struck out as a consequence of a claimant not having access to legal assistance.

For further clarification and advice on small claims and personal injury claims, the experts at Concept Law Solicitors can help.