The Prisons and Courts Bill has been published today and it
contains new fixed tariffs for personal injury claims.
The government had originally planned to increase the
payment limit to £5,000 across the board.
However, the bill sees a change to this plan with a small claims limit
of £5,000 for whiplash injury, but a lower threshold of £2,000 for other
personal injury claims. The bill also
includes a ban on settlement of such claims without medical evidence.
This bill follows a government consultation which ended on
6 January. Justice Secretary Elizabeth
Truss announced the legislation and said that the measures introduced will cut
car insurance premiums by around £40 per year.
The government is “helping to crack down on the compensation culture
epidemic”.
Lawyers will be excluded from low value claims and
successful claimants up to the thresholds announced will not be able to recoup
legal expenses.
James Dalton, ABI director of general insurance policy,
said “The reforms to whiplash claims set out in the bill cannot come soon
enough, for far too long claimant lawyers have been defending a system riddled
with exaggerated and fraudulent claims because they have been profiting
handsomely from it. The gravy train must
stop”. He continued “People want an insurance
claims system that provides compensation and support to those who genuinely
need it. What they don’t want is to be
plagued by spam calls and texts from ambulance chasers, whilst personal injury
lawyers continue to profit from a broken system in urgent need or reform”.
The lobby group Access to Justice criticised the bill. They believe that the small claims limit
“discriminates against ordinary people suffering whiplash injuries and will
open the doors for claims management companies and cold callers to wreak
further havoc on our market”
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