Government confirms plans to increase small claims threshold for personal injuries

23 Feb 2017

Justice Secretary Elizabeth Truss today unveiled plans to increase the small claims limit for personal injury claims as part of the Prisons and Courts Bill. These changes will affect how people will claim for personal injury in the future.

The Bill will increase the small claims threshold to £5,000 for claims related to road traffic accidents, such as whiplash, and create a new threshold of £2,000 for all other personal injury claims.

There had been a lot of concern in the personal injury industry that the limit for small claims would be raised to £5,000 across the board, so it’s some consolation that this hasn’t happened.

However it may be difficult for those with injuries, as they may have to represent themselves against defendants who will be able to pay for legal representation. In addition, the changes introduce a new fixed tariff scheme for compensation which could mean that people are not fully compensated for their injuries.

The government believes that these changes, along with raising the small claims limit for whiplash to £5,000, will lead to car insurance premiums dropping by £40 a year.

However, Neil Sugarman, the president of the Association of Personal Injury Lawyers, disagrees saying: “Data from the insurance industry shows that since 2013, the annual cost of motor-related personal injury claims has fallen by £536 million, yet insurance premiums have continued to rise.”

It’s thought that the small claims changes will be implemented in October 2018 and as it’s only at the bill stage now, changes to it may well be made before it’s passed into legislation. We will monitoring developments with the Bill as it progresses.

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