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Autumn Statement: Surprise personal injury changes announcement

Posted on 30th November 2015 in Legal Updates

Much of the focus on George Osborne’s Autumn Statement was on his changes to tax credit cuts, but (and to the surprise of most personal injury lawyers), he has also put through proposals to increase the small claims limit for personal injury claims to £5,000 (from the previous limit of £1,000) and to abolish the right to general damages for minor soft tissue injuries from road traffic incidents.

The idea was proposed in 2013 but it was then abandoned following a report by the Select Transport Committee. Although there is no timeline for the changes, it is thought that the changes may be implemented in 2016 following a four month consultation.

The proposed changes could affect victims of personal injury and claimant personal injury solicitors alike.

By increasing the small claims limit, victims of personal injury whose damages are worth less than £5,000 will most likely forego legal advice as they will no longer be able to recover any legal fees, even if they win. If they choose to have legal representation, they will be forced to pay for their legal advice, either from the damages they receive or ultimately from their own pocket. It is clear that this will impact heavily upon claimant personal injury solicitors throughout the country and they will be forced to assess the impact that the proposed changes may have on their firms.

The rationale behind abolishing the right to general damages for minor soft tissue injuries is to tackle the alleged ‘whiplash culture’. The government stated that whiplash claims cost the country £2bn a year and the proposals were intended to end the right to cash compensation for minor whiplash injuries. The government have stipulated however that claimants would still be entitled to claim for ‘special damages’ including treatment for any injury (if required) and any loss of earnings.

The proposed changes have received mixed reviews with The Law Society accusing the government of ‘…completely undermining the right of ordinary citizens to receive full and proper compensation from those that have injured them through negligence’. On the other hand, whilst the Autumn Statement was being delivered, shares for some of the largest insurance companies in the UK went up approximately 5-9% on the stock exchange with the proposed changes heralded as a success throughout the insurance industry.

It is still unclear what form the final proposals will take but the announcement has clearly sent shockwaves throughout the personal injury legal profession and there will no doubtedly be casualties that will follow.

If you would like to know how these proposed changes may affect you, please contact Mike Wakeling in our Dispute Resolution team on 01789 206102 or drop him an email.



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