Government Foreshadows EL/PL Small Claims Limit Increase to £1,500

Up until recently, it was not known whether the small claims track limit for employers’ liability and public liability (EL/PL) claims would increase from £1,000 to £2,000, per the Government’s proposals.

In fact, a lack of support from insurers, together with fierce opposition from claimant representatives, begged the question – would it be at all appropriate to increase the limit for this class of personal injury claim?

A fortnight ago, the House of Lords debated The Whiplash Injury Regulations 2021 (draft), which lays down a new tariff system for whiplash injuries (lasting up to 24-months and including any minor psychological injuries) and will be supplemented by an increase in small claims limit for road traffic accident (RTA) claims, to £5,000.

Within the Hansard Report (dated 26 April), Parliamentary Under-Secretary of State (Ministry of Justice), Lord Wolfson of Tredegar, revealed that he had, earlier that day, confirmed that claims limit inflation for non-RTA-related personal injury claims would be less significant than first imagined and would also not be imposed this year.[i]

He was alluding to a Written Statement, which was shared by the Lord Chancellor and Secretary of State for Justice, the Rt Hon. Robert Buckland QC MP, before the debate. This divulged the following information:

‘The Government had previously considered an increase, from £1000 to £2000, to the small claims track limit for all other types of personal injury claims, including employers and public liability claims. However, having considered the views of a number of stakeholders, including from a wide range of representatives from across the insurance industry and the personal injury and trade union sectors, the government has decided to both limit the proposed increase in the small claims limit for all other personal injury claims to £1,500 instead of £2,000 and to defer the implementation of this measure until April 2022.

Delivering this reform remains a key Government priority but we believe that a more modest increase in the small claims track limit for non-RTA related claims is justified. Pausing its implementation for 12 months will enable greater focus to be placed on the commencement of the whiplash reforms and the launch of the new Official Injury Claim service for claimants on 31 May 2021. This decision will also provide affected stakeholders additional time to prepare for the increase in April next year’.[ii]

Lord Wolfson QC was hopeful that his fellow peers would agree that scaling back the Government’s preliminary commitment was a ‘sensible and pragmatic decision’.[iii]

It has certainly been positively received by the Law Society of England and Wales. President, Stephanie Boyce, declared that the decision to revise down the small claims limit to levels that were more or less in line with inflation was ‘good news’, as injured workers should still have access to justice.  

Digressing back to whiplash reforms, it should be noted that several peers, besides labelling the new tariffs as ‘derisory and offensive’ (injuries lasting 3-months will be 90% less valuable, at £240[iv]) have warned of the potential ‘explosion’ of quasi-bogus ‘mixed claims’ farmed by claims management companies (CMCs) and claimant law firms.[v]

There may be a ‘huge challenge’ ahead dealing with litigants who reorder their claims so that additional minor injuries (stemming from the RTA), not caught by the definition of whiplash, become the focal part of their claims (see signs of an unforeseen RTA-related tinnitus epidemic, here). However, parliamentarians have pledged to remain ‘vigilant’ to ensure that regulations are not undermined.

 

[i] HL Deb 26 April 2021, Vol 811. https://hansard.parliament.uk/Lords/2021-04-26/debates/5A52E78B-46F2-44F6-80C3-FC62326AAF05/WhiplashInjuryRegulations2021> accessed 30 April 2021.

[ii] Robert Buckland QC MP, ‘Whiplash Reform Programme Update: Statement UIN HCWS943’ (27 April 2021 UK Parliament) <https://questions-statements.parliament.uk/written-statements/detail/2021-04-27/hcws943> accessed 30 April 2021.

[iii] John Hyde, ‘MoJ agrees to cut EL/PL small claims increase to £1,500’ (27 April 2021 Law Gazette) <https://www.lawgazette.co.uk/news/moj-agrees-to-cut-el/pl-small-claims-increase-to-1500/5108281.article> accessed 30 April 2021.

[iv] Neil Rose, ‘Last chance saloon as MPs and peers urged to derail whiplash tariff’ (26 April 2021 Legal Futures) <https://www.legalfutures.co.uk/latest-news/last-chance-saloon-as-mps-and-peers-urged-to-derail-whiplash-tariff> accessed 30 April 2021.

[v] Neil Rose, ‘Government reduces increase in small claims limit for non-RTA cases’ (27 April 2021 Legal Futures) <https://www.legalfutures.co.uk/latest-news/government-reduces-increase-in-small-claims-limit-for-non-whiplash-cases> accessed 30 April 2021.