Will the Upcoming Package of PI Reforms Include a Small Claims Limit Rise for EL/PL Claims?

Not so long ago, when dialogue on low-value personal injury reform was in its infancy, BC Disease News articles regularly indicated that the small claims track (SCT) limit, which currently stands at £1,000, would likely increase to £5,000, in respect of road traffic accident (RTA) claims, and £2,000, for all other personal injury claims [employers’ liability (EL) and public liability (PL) claims] under Government-drafted secondary legislation.

However, as Parliamentary debate became increasingly focused on establishing a tariff-based system for ‘whiplash’ injury claimants, as was eventually enacted by Part 1 of the Civil Liability Act 2018, proposed SCT changes affecting EL/PL claims went ‘largely unnoticed’.

For this reason, James Dalton, Head of General Insurance at the Association of British Insurers (ABI), considers that initial plans to increase the SCT to £2,000 should be deferred until after the matrix of RTA reforms enter into force, in April 2020:[i]

‘The SCT increase for EL and PL claims remains the Government’s policy but ... the time has come to ask whether this policy remains right, especially in the context of the serious amount of work that needs to be done to deliver the wider RTA reforms.

The IT portal build remains on track, but the policy and regulatory underpinnings of the wider package of reform remain a cause for concern ... The reforms to the process for RTA claims are vital to delivering a more efficient compensation system at a proportionate cost ... So ... our collective effort should be on ensuring we get these reforms done and ... done right.

... We should be concentrating on delivering the regulatory underpinnings for an IT platform that supports unrepresented claimants to make whiplash claims by April 2020. I think that not continuing to pursue the proposed increase in the SCT for EL/PL claims, should ensure that all stakeholders are able to focus on the successful delivery of the changes for RTA claims.

Insurers remain committed to making these reforms a reality. But to do so, we need to be pragmatic, focused and ready to make tough compromises. By not pursuing an increased SCT limit for EL/PL claims, insurers are playing our part to help make the RTA reforms a reality’.[ii]

Aside from an ostensible need to prioritise the full regime of RTA reforms, the fact that the Government has encountered fierce opposition over the magnitude of change required is another reason why increasing the SCT for EL/PL claims is implausible.

As a matter of fact, in May 2018, a Report, published by the House of Commons Justice Committee, expounded on why the Government’s determination on this issue was inappropriate:

‘We are deeply unimpressed by the inability of the Ministry of Justice to quantify the impact of raising to £2,000 the small claims limit for employer liability (EL) and public liability (PL) claims; given the potential complexity of these claims and the role of litigation in maintaining safe and healthy workplaces, we recommend that they be subject to a small claims threshold of £1,500’.

Months later, the Government submitted its Response to the Justice Committee’s call for a less substantial increase, but no compromise was made:

‘Government is satisfied that increasing the limit for PI claims to £2,000 is in line with inflation. It is the Government’s view that the more complex employer and public liability cases should remain in the fast track. The Government believes the Retail Price Index is the most appropriate measure of inflation to increase the SCT limit for this category of PI claims as this is the index used to update damage awards in the Judicial College Guidelines. The proposed limit of £2,000 for non-RTA PI claims reflects the effect of inflation since the limit was last set in 1991’.

All things considered, it is not a far-stretch for Mr. Dalton to presume that the Government will sacrifice a rise in SCT limit for EL/PL claims, when the impending wave of PI sector reforms are rolled out next year.


[i] John Hyde, ‘Insurance boss concedes MoJ should ditch claims limit rise’ (5 September 2019 Law Gazette) <https://www.lawgazette.co.uk/news/insurance-boss-concedes-moj-should-ditch-claims-limit-rise/5101330.article> accessed 5 September 2019.

Neil Rose, ‘Insurers urge focus on RTA portal, not EL/PL small claims limit’ (4 September 2019 Legal Futures) <https://www.legalfutures.co.uk/latest-news/insurers-urge-focus-on-rta-portal-not-el-pl-small-claims-limit> accessed 5 September 2019.

[ii] James Dalton, ‘Eyes on the prize to secure the whiplash portal (3 September 2019 ABI) <https://www.abi.org.uk/news/blog-articles/09/eyes-on-the-prize-to-secure-the-whiplash-portal/> accessed 5 September 2019.