A proposed new law that aims to cut drivers’ insurance premiums and clamp down on whiplash claims, could in fact make it harder for deserving victims to access legal compensation – according to one of the South West’s leading law firms, GA Solicitors.
As part of the reforms, the small claims limit for road traffic accident (RTA) injury claims will rise to £5,000 and to £2,000 for other types of personal injury claim.
This means that road traffic cases with a value of less than £5,000 (£2,000 for all other types of case) will instead have to go through the small claims court, meaning victims will be unable to reclaim the cost of legal representation. The Law Society believes the revised small claims limit will impact a staggering 96% of all RTA claims. If this is the case individuals will have to pay their own legal fees, or lose a share of any compensation awarded.
Matthew Sheather is a partner at GA Solicitors and head of the personal injury and medical negligence team. He joined the Plymouth-based company in 2006 from a large Bristol law firm and has nearly two decades of legal experience. He says: “With road traffic accidents, the new bill is increasing the small claims limit from £1,000 to £5,000, and with all other cases it is increasing it from £1,000 to £2,000.
“The £5,000 is in respect of what we call general damages – that’s pain, suffering and loss of amenity that affects the client following their accident. Essentially, the injury element of the claim not the financial losses. £5,000 is quite high, and with it being within the small claims court, you’re not entitled to recover any legal costs.
“This is a big injustice because the defendants are backed by insurers, who can pay what they want to their lawyers to represent them, while the injured party may be unable to pay for the representation of a lawyer. It becomes a real-life David and Goliath situation.”
“There is a chance it will have a negative impact on everyone”, adds Mr Sheather. “Fixed legal costs were introduced in 2012 and were supposed to bring down insurance premiums – but most people will notice this hasn’t happened. We expect this will have a similar effect, meaning the only ones likely to gain are the insurers.”
What does the new legislation mean for motorists and workers?
As the reforms will affect all types of claims, it could deprive many employees, or people injured in road traffic accidents, access to justice. There is also the potential that health and safety standards could fall should employers be less likely to be challenged.
Defendants, such as insurers, may be more likely to pay over the odds initially to entice people to settle early. The victim could think they are getting a good deal but would not have the legal expertise to know and it could in fact be a much higher value injury.
“I’ve had people who have slipped over and, at first, it appears to be a very innocuous accident.” says Mr Sheather. “However the person has later not recovered as expected and it has become a much more serious injury, impacting on all aspects of their life.”
“A key aspect to bear in mind is that once a case is settled, there is no second chance if you feel you didn’t recover the amount of compensation relative to your injury. If victims are encouraged to settle too early, or if they did not receive professional advice regarding the value of their injury claim, they cannot later attempt to reclaim for the same injury and accident.”
Who will deal with your claim?
If solicitors are unable to assist with claims, it is incredibly likely that claims management companies will step in. They will not necessarily have the legal knowledge to properly risk assess cases and will operate by volume, meaning they could overlook the more complex disputed cases.
Mr Sheather says: “What we will likely find is the people who do it by volume will be less likely prepared to fight disputed cases, because they’ll want to be settling as quickly as they can. The quicker they settle, the quicker they’ll get their money. They won’t want cases running on for a number of years and being contested.
“At GA Solicitors, we’re governed by the Solicitors Regulation Authority and the Law Society, we’re LEXCEL-accredited and have a duty of care to every client we work with. Claims management companies are currently unregulated so work in a much different manner. They will have less checks and balances in place to safeguard the injured victim.”
Why is it important to have legal help?
It’s important to have professional legal advice because you need to have a clear understanding as to how a claim can be built in terms of liability, and then how it is valued.
The opponent could dispute a claim entirely making it difficult for the victim to know what steps to take next, or they may be made an offer which they simply won’t know if it’s fair or not. The defendant however will know because they’ll have been advised by their lawyers at every step.
One of the main issues is that if liability isn’t accepted then these cases become far more complicated and will be contested in court. The defendants will have barristers and a legal team behind them, whereas a lone individual is less likely to have the resources to fund this level of support.
When is the law expected to come in?
The reforms were due to be implemented this spring, but have been postponed by the Ministry of Justice until at least April 2020. David Gauke, the justice secretary, told MPs in August last year: “There will need to be extensive user testing in order to ensure that the system is easy to use for all user groups and that the guidance is clear.”
The testing is due to start this autumn. Injury lawyers had lobbied for the Government to reconsider its plan. The Association of Personal Injury Lawyers (APIL) said that it was disappointing the Government was still going ahead despite the delay, adding that the proposals were an attack on injured people.
Mr Sheather adds: “As a firm, GA always strives to meet the changing needs of its clients. Until the new rules and legal framework are clarified and implemented, it will be difficult to determine what level of support could be provided. However, we are giving some early thought to a fixed-fee service which could include advising on the fairness of any settlement offered.
“Currently, every new enquiry we receive sees an initial assessment, completely free of charge, where we determine the prospects of success of the case. This will continue if and when the new rules come in.”
You’ll find GA Solicitors at Gill Akaster House, 25 Lockyer Street, Plymouth, Devon, PL1 2QW. For further information please call 01752 203500, email [email protected] or visit the website at www.GAsolicitors.com
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