Monday, 7 December 2015

How will the proposed increase in the Small Claims limit affect cyclists?

Here is a guest blog I wrote for the Cyclist Defence Fund website:

http://www.cyclistsdefencefund.org.uk/how-small-claims-limit-affect-cyclists



In the recent Autumn Statement(link is external)George Osborne stated that the small claims limit will increase from £1,000 to £5,000 in personal injury cases. The theory is that cases which fall within the small claims track are straightforward and will not require legal representation. As a result, a party bringing such a case should not be entitled to recover their legal costs.
In personal injury cases this is being brought in so injured people are encouraged to deal with a defendant’s insurance company direct. However, personal injury cases at this level are not always minor or straightforward and the government were even warned against this move in 2013 by a report of the transport select committee. 
To put it in context, a common injury cyclists face after being struck by a car is a fractured collar bone. Under the Judicial College guidelines (which the courts use to assess the value of an injury), a fractured collar bone may be worth £4,290. Most would agree that a fractured collar bone is not trivial, yet such injuries will fall within the cases captured by the proposed increase to the small claims limit.
According to the Financial Services Authority, injured people get an average of two or three times more money if they consult a solicitor rather than negotiating with an insurer direct. In other words, insurance companies will try to under-settle cases when solicitors are not there to hold the companies to account and give the victim a voice.
This will not surprise anyone who has had the misfortune of trying to recover money from an insurer themselves. A client whose home had been burgled recently told me that the process of getting the money from her household insurer was more distressing than the burglary itself. People who have suffered injury will soon have to go through a similar process.
Many will be asking why George Osborne is increasing the small claim limit, and he has explained that the change is being brought in to cut the cost of motor insurance. However, it is debatable whether the purported savings will be passed on to motorists. The number of claims have fallen significantly in recent years yet still the insurance industry has not reduced premiums. 
More importantly, it is unjust to expect a cyclist or pedestrian, who may have suffered a fracture and several thousand pounds of financial losses, to fight against a driver's insurance company without legal representation. The fact that the measure is being taken to save motorists money adds insult to injury.
I would encourage all to sign this petition to keep the small claims limit at £1000(link is external)so that this change in the law will be debated properly in Parliament and to give injured people the chance to retain their voice.