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An increase to the small claims limit?

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Just a quick refresher, currently personal injury (this includes clinical negligence) claims with a value of less than £1,000, fall within the ‘small claims track’. The result of this is that a prospective claimant is unable to recover their legal costs (ie. their legal representative’s costs) from the losing Defendant.

There is technically an option for the Claimant to enter into a Damages Based Agreement (DBA) in which they agree to pay a percentage of their damages to their  Legal Representative. With the current Small Claims Limit this is generally unviable, as DBA’s are capped at 25% of damages, so finding a Lawyer who would be willing to represent a Claimant for £250 or less, is highly unlikely - especially when charge out rates start at around £120 per hour.  

The Lord Chancellor, David Lidington, has just confirmed that the government plans to push ahead with its proposals to increase the small claims limit. Speaking at a justice select committee meeting, Mr Lidington said that the small claims limit for Personal Injury (RTA’s will be increased to £5,000) cases would be set at £2,000.

With the proposed increase, some Law Firms have indicated that they believe more straightforward cases could potentially still be viable for them under a DBA. However for this to be feasible, Lawyers would need to be able to rely on the courts taking a robust approach in recognising when the complexity of a case (such as a minor injury caused by medical negligence) means it must be moved to the fast track (where costs are recoverable from a Defendant), as well as there being a rigid enforcement of the costs rules in relation to unreasonable conduct by opponents. But these are big ‘Ifs’.

Consequently it is very likely that the majority of Claimants will not, in fact, have the benefit of a lawyer – meaning that they will be up against the defendant insurer on their own, using the small-claims process. This will place the individual at a huge disadvantage, especially if they have no previous experience of claiming for an injury, and so are unlikely to have much idea as to what their claim is actually worth. It follows that an unrepresented Claimant is not going to get as much compensation out of an insurer as they might have done if they were represented.

Mr Lidington sought to allay fears by insisting that technological changes would make small claims “much more accessible” to litigants in person, though this will be cold comfort for many.

Details of when the reforms are to be implemented were not confirmed by Mr Lidington. However, he did state that they were ‘in the pipeline’, but that Brexit negotiations were the government’s priority. One has to therefore assume that as Brexit negotiations are predicted to last for another 18 months or so, any increase to the Small Claims Limit is unlikely to be implemented until perhaps later in 2019.

If you want further information about this particular topic, or wish to discuss the possibility of bringing a claim for Clinical Negligence - or indeed any other type of injury, please contact the Dutton Gregory Clinical Negligence Team on (01202) 315005, or email c.hayter@duttongregory.co.uk   

NB This article does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Dutton Gregory LLP.