Last week the Law Society expressed concern about Ministry of Justice (MoJ) proposals to increase the small claims limit to £5,000 for motoring claims and £2,000 for non-road traffic personal injury cases.
The MoJ published its intentions in early 2017 and asked for consultation on the likely impact of the change. The Law Society of England and Wales concerns were highlighted in their carefully considered response.
The society stated that increasing the value of personal injury claims allocated to the small claims track would have the effect of limiting the amount of legal advice and guidance a claimant could receive. Personal injury claimants would also be negatively affected as recent research by the Law Society showed 76% of medical experts would not accept instruction from claimants if a solicitor was not representing them. This means, if you wanted to make a personal injury claim and it was valued at under £2,000 (or £5,000 for an RTA), you may find it impossible to obtain expert medical evidence to support your case.
The Law Society stated in its consultation document:
“Personal injury claimants require legal representation to bring claims. It is a mistake to equate value with complexity and to conclude that representation is not needed. Raising the small claims limit to the levels proposed risks removing solicitors from the process and leaving claimants either unable to bring claims or driven to use the services of Claims Management Companies (CMCs) or paid McKenzie friends.”
Access to justice is a foundation principle of a free and democratic society. However, this type of proposal has the effect of being, as Lord Thomas of Cwmgiedd eloquently put it, “unaffordable for most”.
What is the small claims track?
When a civil claim is filed in court, it will be allocated to one of three tracks: the small claims track, the fast track, or the multi-track. Part 27 of the Civil Procedure Rules governs the small claims track.
In general, if a claim is worth less than £10,000, it will be allocated to the small claims track. The purpose of this is to prevent clogging up England and Wales’s already overloaded Courts with what are considered low-value, less complex cases. The problem with this formula is, for a small business, a claim of £8-9,000 is unlikely to be considered “low-value” by the owner. In addition, although the value of a claim may be under £10,000, its complexity may be high and require the best advice from an experienced civil litigation lawyer.
The exceptions to the £10,000 claim rule are:
a) In personal injury cases, the claim will only be sent down the small claims track if the value of the damages for personal injury are £1,000 or less, and;
b) Claims against landlords by tenants for failing to make repairs will only be allocated to the small claims track if the value of the repairs is less than £1,000 and the value of any other claim for damages is not more than £1,000.
The court will consider the complexity of the claim and whether the case is one of public interest before allocating it to the small claims track. However, author and former civil and family judge Stephen Gold, once commented in the Law Society Gazette that “…the basement which hosts small claims, sometimes jaw-droppingly petty …frequently…[raise] questions of law which would be worthy of a day and a half in the Supreme Court and a dissenting judgment or two.” Such comments would indicate that cases complex enough to warrant expert evidence and the best civil litigation solicitors are being shuffled off down the small claims route, which may be doing the claimants a severe injustice.
What are the proposed consequences of increasing the small claims limit for RTAs and non-road traffic personal injury cases?
In their consultation response paper, the Law Society made the following points regarding the consequences of increasing the value of personal injury claims destined for the small claims track. They included:
- Unrepresented claimants would be forced to pay significant upfront fees to bring a claim if the changes go through as currently proposed. At present, the cost of a medical report in a low-value personal injury claim is £216. If an additional report is required from an orthopaedic surgeon the cost will be £504, or if a report is required from a consultant in Accident and Emergency the cost will be £432. In addition, in claims of £3,000-£5,000, claimants also need to pay £205 to issue Court proceedings and a further £335 hearing fee. This means a claimant must pay a minimum of £756 to bring a personal injury claim to court. Currently, these fees are absorbed into the Conditional Fee Arrangement (CFA, also known as ‘no win, no fee’); therefore, they are absorbed by the representing law firm until the conclusion of the trial or settlement. Under a small claims track, the claimant would be forced to pay these fees up front, an impossible ask for many.
- Many solicitors would be unwilling to take on cases under a CFA. This would result more claimants being required to take out Before The Event (BTE) insurance.
- Although claimants may be unable to access a solicitor, defendant insurers will have access to in-house legal counsel to advise them throughout the claims process. Law Society president Joe Egan said: “The David and Goliath analogy could not be more apt. By raising the small claims limit, the government is removing solicitors from the claimant side of the process. Meanwhile, defendant insurers will still have the benefit of trained claims handlers who will have recourse to formal legal advice throughout the process.”
Being able to make a personal injury claim can make a significant difference in the life of a person who has suffered damage due to the negligence of another individual or organisation. Not only can it assist with getting a robust rehabilitation plan created and executed, but compensation can also provide the funds needed to pay the bills while the victim is recovering from their injuries.
As Joe Egan stated: “The Law Society cannot accept that a £5,000 limit for motoring claims is reasonable. It will mean injuries such as facial scarring, fractured ribs, a bruised chest and whiplash to the neck will be considered as ‘small claims’, and people will be forced to seek compensation without legal advice”.
Having to undertake such a fight without the best advice and support of a civil litigation solicitor is an unfair demand to make on someone who may be struggling to return to normal life after a serious accident, and is likely to have no knowledge of the legal process.
Not only does such a proposal go against the principle of access to justice, it flies in the face of human decency.
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Posted on: Monday, 22 January, 2018