As one might expect, claimant lawyers and the insurance industry have reacted very differently to the latest setback to the Government’s plans on small claims reform. In a recent report a committee of MPs has heavily criticised the proposals, citing as its main concern access to justice. The rationale for their argument is that by increasing the current limit to £5,000 more cases will inevitably fall under the small claims procedure and as most claimants tend to be unrepresented (as they cannot claim their costs in the event of success), many will either be unable to proceed, reluctant to proceed, or decide not to pursue claims at all – which, some cynics have suggested already is exactly the insurance industry’s desired result.
The report also criticises the paucity of reliable data on fraudulent claims – a prime mover in the legislation – and has urged Government to work with insurers to collate solid data on fraudulent claims as opposed to categorising claims that are suspect due to “unexpected consumer behaviour” as fraud.
Predictably, claimant lawyers and the insurance industry have clashed over the findings of the report. Lawyers have urged the Government to think again on the proposals and that people genuinely injured should be given sufficient access to justice to make a claim, whereas the ABI hasn’t held back, stating that the report reads like a “shopping list” provided by claimant lawyers, and would allow lawyers to continue to “line their pockets” thanks to the “whiplash gravy train”.
There is little doubt that the Government still has a very delicate balancing act ahead if it is to continue with the reforms whilst maintaining access to justice for all.