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MoJ agrees to cut EL/PL small claims increase to £1,500

May 4 2021

The government has announced that it will increase the small claims limit for non-RTA cases only to £1,500, scaling back its initial proposals.

In a statement ahead of a House of Lords debate on the whiplash reform programme, justice minister Lord Wolfson of Tredegar said that the government had opted not to increase the small claims limit to £2,000 for employers and public liability claims.

This change had been provided for in part one of the Civil Liability Act 2018, the legislation underpinning the new £5,000 small claims track limit for RTA claims, which comes into force at the end of May.

The EL/PL increase had always been fiercely opposed by claimant representatives and was not even supported by insurers. Wolfson said the government had considered the views of a wide range of representatives from across the insurance, legal and trade union sectors and decided to increase the limit to £1,500. He also confirmed that implementation of the new limit will be deferred to April 2022.

Wolfson said: ‘Delivering this reform remains a key government priority but we believe that a more modest increase in the small claims track limit for non-RTA related claims is justified.

‘Pausing its implementation for 12 months will enable greater focus to be placed on the commencement of the whiplash reforms and the launch of the new Official Injury Claim service for claimants on 31 May 2021.’

Both houses of parliament are this week to debate the proposed tariffs for whiplash damages after 31 May, with implementation expected to be a formality.

The whiplash injury regulations set limits on the damages payable for a whiplash injury of up to two years and include any minor psychological injury suffered at the same time. The regulations allow the court to apply an uplift of 20% in exceptional circumstances.

Wolfson said the government was ‘open to the possibility’ of reviewing the tariffs earlier than the statutory three years, following a suggestion from the lord chief justice.

Law Society of England and Wales president I. Stephanie Boyce said it was good news the Ministry of Justice will revise down the proposed increase to the small claims limit for EL and PL claims – more or less in line with inflation – as injured workers should still be able to access justice.

But she added: ‘Changes to the small claims system resulting from the impending RTA reforms may well lead to an influx of litigants in person to the courts after May 2021 and the MoJ should first assess whether the beleaguered court system could cope with any additional burden.

‘RTA claims processes should also be robustly evaluated to make sure the deferred introduction of the claims limit to April 2022 for other personal injury claims is viable.’