The small claims limit & whiplash debate

17 December 2015


Is the small claims limit increase a done deal or can a realistic challenge be mounted?

We are told that there has been another “high level meeting” on 9th December between the government and senior members of the Motor Insurance industry. I’m getting a feeling of deja vu as this all sounds very familiar and we know what happened last time, insurers got just about what they asked for.

There has been a sea change since the Conservatives came to power with insurers on the winning side of just about every argument. So will they win this one (small claims & whiplash) too, which many think will be the death knell for Solicitors in the PI sector?

What if anything can be done to challenge the proposals?

One thing is for certain, if any such opposition is to have a chance of success then it must be very different to the LASPO experience, where the ABI spoke with one voice for the insurance lobby whilst their opponents proffered mixed messages from a disparate group. Moreover the legal challenges via Judicial Review failed spectacularly.

Sitting back and doing nothing is admitting defeat and that is not an option, but unlike LASPO I would suggest some change may have to be accepted to give any opposition credibility as simply arguing for the Status Quo is unlikely to find favour.

Previous opposition has been based on the notion of access to justice and that got precisely nowhere. So what options are still open? Well interestingly the suggestion that credit hire, a real hobby horse for insurers and the ABI alike, could be a pointer. The only successful campaign I can remember in recent years was that run by Steve Evans & the CHO in relation to the CMA enquiry and the subsequent GTA review. That was not based on points of principal but hard facts and economic realities.

There is common ground if you look for it, for example no one like fraud and nuisance calls. Let’s solve these problems, both of which will reduce frequency and claims costs rather than taking the proverbial sledge hammer to smash the nut.

If the claimant lobby want to avoid drowning as the tide comes in I would suggest;

  • A unified campaign with one voice which is well resourced and co-ordinated
  • An economic approach which analyses the insurers data and challenges it
  • Develop realistic ways of defeating fraud and proffer them as alternatives
  • A detailed analysis of insurer behaviour and the part they play in claims frequency is undertaken