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The annual Budget usually brings about divided opinion across the country but the most recent announcement by George Osborne regarding the limit on small claims in personal injury cases has caused uproar from the law society and claimant personal injury firms.
Please take a look at this recent article from the Law Society Gazette which sets out the backdrop of this announcement and the impact this will have on claimant’s rights going forward. In a nutshell the Law Society are arguing that raising the small claims limit to £5,000 will effectively undermine claimant’s rights and stop those that have suffered serious injury from gaining proper compensation. This change would not only affect the general public but would also bring about significant commercial impact on claimant firms. On the very eve of this announcement a giant global personal injury firm saw its share price halve over night! What we will see is claimant firms take a hit on their costs due to the fact they will be less likely to progress cases into the fast track unless of course there is substantial evidence to warrant a move to the fast track. This will of course not be easy with the fact that most injuries usually fall within the small claims remit and the £5,000 limit on compensation will in turn limit claimant lawyers costs . This new costs limit combined with the Jackson reforms means more uncertain times ahead for claimant firms.
On the other side of the fence is the insurance industry that is looking to benefit massively from this change if implemented by 2017, as proposed. Where claimant firms saw a share drop, insurance companies saw a rise in their share prices. Insurance companies are all for the change because it would stop the ‘whiplash culture’ and deter any exaggerated claims from being made. Like everything in life, there are always two sides to a coin.
Even with these changes on the horizon the personal injury market is buyout, particularly the defendant market. I have seen a significant increase in defendant personal injury teams across the Midlands embark upon a massive recruitment drive for their motor/casualty personal injury and fraud teams. It therefore begs the question; if defendant PI teams are recruiting there must be a surge of claimant’s making personal injury claims but how long will this last? If the proposed changes go ahead as planned, we are likely to see a downturn in claimants fighting their claims which will invariably have a knock on effect on claimant personal injury teams but it is probably safe to say the insurance industry will likely to be booming!
I specialise in insurance recruitment across the Midlands and am currently working with large international and national personal injury practices that are recruiting for defendant or claimant lawyers looking to cross over to defendant practice into their RTA, EL/PL and insurance fraud teams. If you are interested in having a private and confidential discussion about these roles please contact Bhavisha Duggal at BCL Legal.