Spending review addresses low value personal injury claims

Chancellor George Osborne announced in his spending review yesterday that he intends to raise the small claims limit for personal injury claims to £5,000, and to do away with general damages for “minor” soft tissue injuries.

In practice, this will mean the following:-

The Chancellor has said that he suspects that these reforms would remove over £1 billion from the cost of providing motor insurance in the UK and he would therefore expect the motor industry to pass on these savings to motorists and introduce lower premiums. However, there is little evidence to date that the raft of reforms which have been implemented over the last few years have translated into lower premiums.

These planned measures raise a number of concerns:-

From a European perspective, the regulations state that where compensation is to be awarded to victims of road traffic accidents, damages should be quantified. These rules are inclusive of claimant’s seeking damages for “minor” soft tissue injuries and a reform to do away with general damages for “minor” soft tissue injuries could be in contravention of the European Regulations. 

The Government will be consulting in further detail on these planned reforms in the New Year. We wait to see whether these reforms are implemented.  

If you need advice on this, or any personal injury matter, please contact Colin Cook at Hatch Brenner on 01603 214 220 or [email protected]