Small claims court - damage limit changes (bad news)

[Farrina]

There has been some quite lively debate this week on this forum about a legal judgement concerning a Time Trialling cyclist's damages being reduced by 20% owing to deemed contributory negligence on his part.

Well here comes another "corker" that is more likely to affect the average cyclist (rather than our poor unfortunate TT, whose case was likely to be relatively rare).

The Cycling Solicitor has posted a most concerning update on his blog about recent changes to small claim court claim procedures (predominantly an increase in the small claims limit from £1,000 to £5,000 and the negative impact this will have on those who are unfortunate to be injured (but not as badly as our TT's) and looking to recover damages from other parties

One comment in particular that caught my eye on his blog was

"Under the new scheme, if someone suffers a soft tissue injury for 6 months in an accident at work they would receive £2,150 for their injury; someone suffering the same injury in a road traffic incident would receive £450 for their injury. In addition, the person injured in a road traffic incident will not have the same access to a legal representative."

And being a member of Cycling UK or the BCF is not going to help as they are unlikely to cover your legal costs.

Full article is here http://thecyclingsolicitor.blogspot.co.uk/2017/02/how-will-cyclists-be-affected-by.html

[irc]

It appears that cyclists are the collateral damage from the govts attempts to cut down on whiplash insurance fraud.

In the UK 78% of personal injury claims following road accidents are for whiplash, twice the average percentage of whiplash claims across Europe. It compares to 30% in France and Denmark, 31% in Spain, 35% in the Netherlands and 68% in Italy.

http://www.actuarialpost.co.uk/article/ ... e-4710.htm

[PH]

Discussed here a couple of months a go when Cycling UK launched a campaign against it (a search for any of the key words would have found it)
viewtopic.php?f=6&t=110980
Some posters actually think it's a good idea...

[thelawnet]

this is quite misleading. especially as the author has a huge vested interest, as he earns his crust from charging fees.

the current small claims limit is £10k, but no more than £1k can be a personal injury. The £1k will increase to £5k but for RTA cases only. Previously a firm could claim over £3,000 in costs if a £1000 personal injury claim went to trial. This is obviously disproportionate, and the limit had not increased since 1991.

Currently if you want to claim £9k for your faulty car, you will have to pay your own legal fees (assuming you didn't want to represent yourself), which would be several thousand pounds.

"In the future, insurers have no incentive to act reasonably to keep the injured person's legal costs down as they will not have to pay them – even if they drag a case all the way to court. "

The idea is that you don't incur any legal costs, you just file a small claim by yourself and wait for them to pay up. The reality of the matter is that the insurer has no incentive to go to court! Not the other way around. The cost of them defending the claim makes it much better to settle. The claimant has the power, as they can handle the claim by themselves, whereas the defendant will have to pay someone to do so.

It's much more difficult to get justice when the opposition (and they do, believe me they do: this is negotiating tactic #1) threatens you with legal costs if you lose. Now that option is taken away.

It's manifestly unnecessary to employ a solicitor for say a £1500 personal injury claim - a simple small claim for this amount will typically be settled as its not economic for them to defend.

Under the new scheme, if someone suffers a soft tissue injury for 6 months in an accident at work they would receive £2,150 for their injury; someone suffering the same injury in a road traffic incident would receive £450 for their injury. In addition, the person injured in a road traffic incident will not have the same access to a legal representative.

I'm not sure if he does not know what he is talking about, or he is being deliberately misleading by conflating something which has no impact on cyclists.

The Bill says:

"For the purposes of this Part a person suffers a whiplash injury because of
driver negligence if—
(a) when the person suffers the injury, the person—
(i) is using a motor vehicle other than a motor cycle on a road or
other public place in England or Wales, or
(ii) is being carried in or on a motor vehicle other than a motor cycle
while another uses it on a road or other public place in England
or Wales,"

The purpose of the bill is to reduce the cost to car insurers or spurious 'whiplash' claims. Cyclists are not within the scope of this bill

[meic]

The PURPOSE of the bill is to reduce whiplash claims and whiplash is only for motor vehicle occupants.

The £1k will increase to £5k but for RTA cases only.

That says RTA cases only, not whiplash cases only.

Do we have any confirmation that the increase in the small claims injury limit is restricted to whiplash claims for motor vehicle occupants only or does it actually extend, beyond the stated purpose of the bill to all RTA cases?

[PH]

It's manifestly unnecessary to employ a solicitor for say a £1500 personal injury claim - a simple small claim for this amount will typically be settled as its not economic for them to defend.

Why do they need to defend anything? They just say your case is only worth £300 and leave it to you whether you accept that or start trying to come up with the evidence to support the idea that it's worth £1,500. Isn't this largely what the legal profession do for you? Now you have to do it for yourself, at a time when you may be struggling from the injury and any other consequences of the incident, like loss of earnings. If you then do all the work to make your case, they can change their mind and make another offer the day before your case is heard, they’ve nothing to lose by being uncooperative.
Here’s a simple enough question, you believe your claim is worth £1,500 and the week before the case is heard they make you an offer of say £1,200. How many people do you think have the confidence to turn that down?

[meic]

Here’s a simple enough question, you believe your claim is worth £1,500 and the week before the case is heard they make you an offer of say £1,200. How many people do you think have the confidence to turn that down?

I dont know if they are even "allowed" to do that within the process. If they did do it then they have just moved the goalpost in your direction and probably re-positioned the final settlement between £1200 and £1500 instead of between their last offer and £1500.
In the small claims court you have almost nothing to lose by taking it through to the end, I dont know if they would forfeit your court fee for failure to accept, court fees were under a hundred quid last time I looked but were free for the poor. You could be liable for witness fees and a day's pay for people attending "against" you, if you lose or have been unreasonable.

[thelawnet]

The PURPOSE of the bill is to reduce whiplash claims and whiplash is only for motor vehicle occupants.

The £1k will increase to £5k but for RTA cases only.

That says RTA cases only, not whiplash cases only.

Do we have any confirmation that the increase in the small claims injury limit is restricted to whiplash claims for motor vehicle occupants only or does it actually extend, beyond the stated purpose of the bill to all RTA cases?

two completely different things happening here:

small claims limit for PI claims increasing from £1k to £2k for non-RTA cases, and £5k for RTA cases. Not specific to motor vehicles at all.

AND

new (low) compensation tariffs applying to soft tissue injuries ('whiplash') for motor vehicle occupants only

So a £2,500 cycling injury will still be a £2,500 cycling injury, you just will have to handle the claim yourself, or pay a lawyer out of your own pocket.

[thelawnet]

It's manifestly unnecessary to employ a solicitor for say a £1500 personal injury claim - a simple small claim for this amount will typically be settled as its not economic for them to defend.

Why do they need to defend anything? They just say your case is only worth £300 and leave it to you whether you accept that or start trying to come up with the evidence to support the idea that it's worth £1,500. Isn't this largely what the legal profession do for you? Now you have to do it for yourself, at a time when you may be struggling from the injury and any other consequences of the incident, like loss of earnings. If you then do all the work to make your case, they can change their mind and make another offer the day before your case is heard, they’ve nothing to lose by being uncooperative.
Here’s a simple enough question, you believe your claim is worth £1,500 and the week before the case is heard they make you an offer of say £1,200. How many people do you think have the confidence to turn that down?

the issue for them is that the legal profession charge £200/hour and more. it's not exactly economically viable to pay someone to tell you that your case is worth only £300, because you quickly spend £3000 doing so, and you don't get that back if you win, because it's a small claim.

your £1500 claim only costs £70 to file with the court (recoverable if you win), plus £115 if it goes to trial.

and if they offer you £1200, you say 'see you in court'. And they might well not even turn up and you win by default. Because costs for a trial are currently in excess of £2500 - just for the trial. And not one penny of that is recoverable.

Moreover, currently PI claims from £1000 to £5000 are in the scope of Part 36 Offers. These are legal Swords of Damocles - basically the defendant can say 'I don't think you will get £1500, but I will offer £1200 on a Part 36 basis'. The consequences of that NOW are that if you say 'see you in court', and you don't beat their offer, you have to pay all of the defendant's legal costs after their offer.

So basically in the case where your claim is a winning one, worth say £1200 to £2000 but people aren't 100% sure precisely how much, then if the defendant lowballs with £1200, you are mad not to accept the offer, because the consequences of not settling are too expensive.

Whereas now saying 'sorry no deal', there will be no costs consequences for you. You might even demand £2000 even if you know a judge would say '£1500', on the basis that there's no risk to doing so (ok, the filing fees vary slightly depending on the claim amount, but there's not much in it)

Only a lawyer would claim that it's better that people are forced to use lawyers.....

[meic]

Because costs for a trial are currently in excess of £2500 - just for the trial. And not one penny of that is recoverable.

Is this the "internal costs" for the insurance company to prepare for and attend the small claims court?
Nobody has to pay those sorts of money in fees for a small claims court, do they?

[thelawnet]

Because costs for a trial are currently in excess of £2500 - just for the trial. And not one penny of that is recoverable.

Is this the "internal costs" for the insurance company to prepare for and attend the small claims court?
Nobody has to pay those sorts of money in fees for a small claims court, do they?

those are the legal costs currently allowable for a £2k PI trial. to pay for barristers. it's a reasonable guide to what it would actually cost a company. although under small claims regime I guess actual costs for them would fall. I think companies in the position of making/facing large numbers of legal claims have various ways of cutting costs by employing less expensive/qualified people, but it's never going to be cheap.

the hearing fee is separate, and currently £545 for a £1500 pi claim, but will fall to £115 under the new regime.

[irc]

All looks good to me. I presume this is all England/Wales specific? Or is there any change to the rules in Scotland as well.

[PH]

It's fine that a few people are happy to go it alone, I understand there's nothing to stop them doing so now. They're wrong to think that applies to everyone, it certainly doesn't to me. My "expertise" comes from one claim, it was a tough time even with a solicitor, the insurers argued every possible point. After a year they made an offer that was a quarter of the final settlement, which included a lot of technical detail as to why that was a reasonable amount. It's David and Goliath, it doesn't matter that a fairy angel arbitrator steps in at the twelfth round and evens things up, the Goliath is looking for the knockout blow right from the first bell. If there'a problem with legal costs, address that. The bill from my case was for time it took to counter the insurers claims, they're still going to be making those, they haven't had their hands tied. I wasn't claiming against the insurance company, but against the driver, I lose my access to expert help, they keep theirs, how anyone can see that as fair is beyond me.

[Richard D]

I've seen many litigants in person, representing themselves without any legal advice, royally stuff things up (or at least make things unnecessarily difficult for themselves). It's not a good way to run a legal system that is inevitably quite complex even with straightforward matters.

[meic]

Legal representation costs money, big money.
The small claims courts allows poor people a chance to have their case put before a judge without an "arms war" of solicitor power. A lot of the cases going to these courts are so blatantly clear cut that the court is only enforcing what clearly should have happened in the first place, without the need to line the pockets of solicitors.

The present limit has been at that level for over 25 years, so it probably was due for a substantial increase anyway.