EL/PL Claims Excluded from Small Claims Track Reform – For Now – As 31 May Enforcement Date is Set

The UK Government has officially confirmed that its package of reforms, affecting small claims track personal injury claims, will enter into force on 31 May 2021, with the intention of limiting fraud, reducing excessive costs and simplifying the process for making claims.[i]

Affected stakeholders are therefore beginning a ‘frantic’ 3-month period of acclimatisation to what will soon be the new normal.

Last week, the relevant statutory instruments to support these reforms were unveiled.

Made in exercise of powers conferred to the Lord Chancellor under the Civil Liability Act 2018, The Whiplash Injury Regulations 2021 (draft) were laid before Parliament. This establishes tariff-based damages for road-traffic accident (RTA)-related whiplash injuries (plus ‘minor’ psychological injuries) and a ban on the settlement of claims for whiplash injuries without first seeing appropriate evidence of the whiplash injury.

Simultaneously laid before Parliament were the Civil Procedure (Amendment No.2) Rules 2021, which makes changes to the Civil Procedure Rules to accommodate changes to the small claims track limit for RTA to £5,000, the new RTA Small Claims Protocol, medical reports, claim forms, etc.

Besides these statutory instruments, the Government also published the new Pre-Action Protocol, the 129th Update to the Practice Directions and consultation outcomes on the sufficiency of medical reporting organisations (MROs) and direct medical experts (DMEs).

Essentially then, from 31 May, it is clear that all RTA claims under the value of £5,000 will fall into the new online poral, designed by the Motor Insurers’ Bureau, which has been designed to be used by litigants in person (LiP). An increase in LiP is expected, due to an increase in the number of claims that will no longer qualify for recoverable incurred legal costs.

Exempt from the new small claims track are children and protected parties.

Ensuing a consultation with the Lord Chief Justice, the injury duration-dependent tariffs for low-value RTA claims are:

2.PNG

If a person suffers multiple whiplash injuries in a single incident, the injury with the longest duration will be significant when valuing the claim.

Courts are permitted by the Regulations to award a maximum uplift of 20% in ‘exceptional circumstances’, i.e. where the injury is ‘exceptionally severe’ and the degree of pain, suffering or loss of amenity (PSLA) caused by the injury deems it appropriate.

What is more, a small, fixed sum may be added to the prescribed RTA tariff to cover ‘minor’ psychological injuries suffered in the course of the whiplash-inducing incident.

At present, no regulatory provision has been instilled for the proposed increase in small claims limit for employers’ liability and public liability (EL/PL) claims to £2,000. As such, the existing limit of £1,000 is maintained.

However, the Ministry of Justice (MoJ) informed Legal Futures that it remains committed, in spite of cross party discordance, to follow through with its previously stated aims.

It is still possible, albeit a slim possibility, that EL/PL claims reform could be in force by 31 May.

 

[i] Neil Rose, ‘It’s 31 May – MoJ fires whiplash reforms starting gun’ (26 February 2021 Legal Futures) <https://www.legalfutures.co.uk/latest-news/its-31-may-moj-fires-whiplash-reforms-starting-gun> accessed 26 February 2021.

John Hyde, ‘Government reveals long-awaited whiplash rules and tariffs’ (26 February 2021 Law Gazette) <https://www.lawgazette.co.uk/law/government-reveals-long-awaited-whiplash-rules-and-tariffs/5107581.article> accessed 26 February 2021.