Impact assessment of the forecast small claims increase instructed by Ministry of Justice
With both Personal Injury Lawyers and claims management industry here in the UK still reeling from news that the government plans to ramp up the Small Claims limit from £1,000 to £5,000, a Labour MP raised the question as to whether or not the Justice Secretary had taken into account the potential effects this move would have on low income claimant’s access to justice once the proposals had become law; and moreover if the minister tasked with overseeing the changes instigated by the Chancellor – Michael Gove – had considered the long-term ramifications of such significant revisions.
Birkenhead MP Frank Field’s insistence that greater transparency was required at this juncture prompted Justice Minister Dominic Raab to confirm that the government would consult on the exacting details of the somewhat contentious new reforms being pushed through in due course.
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Responding to the concerns aired by Field, the Treasury spokesperson also went on to add that any necessary safeguards would be duly discussed further, whilst they made assurances that the consultation itself will culminate in the publishing of an official Impact Assessment.
MoJ forced into publishing findings of impact assessment, instigated by questions posed by Labour MP fearing access to personal injury claims for people on budgets is being compromised
All this recent debate was triggered by George Osborne setting out last November that Personal Injury claim limits should rise from the existing £1,000 benchmark to a sum of £5,000, which from the government’s perspective would – they feel – go a long way to removing lawyers from small claims compensation process; who, for the government’s part, believe are wrongly capitalising on the still burgeoning small claims sector.
At the same time the Chancellor’s objective – and said to be one of the primary reasons why the opinion-polarising policy was packaged from the outset – was to help shape a downturn in motor insurance premiums, based on the assumption that car insurance providers would essentially pass on projected savings on legal costs.
According to several reputed sources, the Association of Personal Injury Lawyers met with the Ministry of Justice a few weeks ago, where the latter explained to the former that such recommendations as the ones outlined and still subject to being legally acknowledged were being put into place so as to ensure that claims management firms didn’t jump directly into the space vacated by lawyers.
A resultant report on CMC regulation is slated for release by April at the latest, while it’s also been said that the government is mulling over another separate proposal which would effectively see general damages for what’s referred to as ‘minor’ soft-tissue injuries scrapped completely.
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