MPs call for proper explanation of small claims rise

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Neill: Pleased with delay

MPs on the justice select committee have called on the government to explain why it considers the proposed increase in the small claims limit to £5,000 “proportionate”.

They also sought confirmation that the whiplash reforms will be delayed further than they already have been if the new online platform that will underlie them is not ready for April 2020.

The comments came in a letter from committee chair Bob Neill MP to justice secretary David Gauke following the Ministry of Justice’s response, published last week, to the committee’s report on the proposed increases in the small claims limit.

Mr Neill noted that how the response described the proposed increase to £5,000 for road traffic accident claims was proportionate, “without providing an explanation of this assertion”.

He wrote: “Please could an explanation be provided to us?”

The letter also questioned why the government was “satisfied” that an inflation-based increase to the small claims limit for personal injury should be calculated from 1991, rather than from 1999 when the limit was adjusted to exclude special damages.

The committee calculated this whould leave a figure of no more than £1,500.

Mr Neill said: “You will be aware that Lord Justice Jackson used 1999 as the starting date when discussing this issue in the context of his review of civil litigation costs, and we find it surprising that the government should now adopt a different approach to that of member of the senior judiciary.”

More generally, Mr Neill said the committee was “particularly pleased” that the government had decided to delay implementation of its whiplash reforms by a year to April 2020 and would start large-scale testing of the online platform for claims six months before. This followed the committee’s recommendation.

“The revised timing will also allow account to be taken of the post-implementation review of part 2 of the LASPO Act,” he said.

But he added: “Please could you confirm that there would be a further delay in implementation should user testing demonstrate that the platform or user guidance needs additional development time, or should the “’assisted digital’ route prove inadequate to meet the needs of those who are digitally disenfranchised.”

Mr Neill also welcomed the decision to allow employer’s liability and public liability claims to remain on the fast-track and the assurance that these cases would be outside the scope of the new portal.

“However, we would like to ask for clarification as to whether this applies to all EL and PL claims, or only to those that are deemed more complex (as the government response is ambiguous on this point).”

He also asked “when and how” the government would decide whether to exempt vulnerable road users from the higher small claims limit

“If you decide not to proceed with such an exemption, would you please explain your decision in the light of compelling evidence presented in our report as to why vulnerable road users should be excluded.”

The committee welcomed too the government’s decision to introduce into the Civil Liability Bill a means for reporting on the public commitment made by insurance companies to pass on to consumers the savings made by the reforms.

“The committee looks forward to seeing the amendment and assessing it. We believe it is critical to hold the sector to account on this commitment, which has provided a central policy justification for these reforms.”

The second reading of the bill in the House of Commons has been scheduled for 4 September, the first day after the summer recess.