Civil Liability Bill

Written evidence submitted by Thompsons Solicitors (CLB09)

1.0 Executive Summary

· This response relates only to Part 1 of the Civil Liability Bill (‘the bill’), relating to whiplash, and in the context of related proposals to increase the small claims limit which are not part of the Bill but are proposed to be advanced by statutory instrument.

· While the stated target of the bill is whiplash, its impact is far wider and overturns legal principles established for generations - in particular, that the ‘polluter pays’: that the party which is responsible for the injury is therefore responsible for compensating the injured party for their losses, inclding the costs of bringing a claim.

· The Bill Committee should, therefore, consider the bill in the wider context of the government’s whole package of reforms and, in particular, on their impact on injured people and their access to justice.

· The most significant element of the wider package of reforms are the proposals to increase the small claims limit from £1,000 to £2,000 in all cases, including injures at work, and to £5,000 for road traffic accident cases. These changes would leave over 500,000 injured claimants per year without free legal assistance in the small claims court. We estimate, too, that they would result in approximately 350,000 injured people every year being put-off from even starting to pursue a claim.

· Despite the seriousness of these changes, the government’s approach to enacting them by statutory instrument means they will not be subject to the level of parliamentary scrutiny and oversight appropriate for their magnitude.

· We question the government’s stated justification for a small claims limit increase to £5,000 for road traffic accidents. Contrary to the government’s claims, the small claims limit was last changed in 1999 - an effective 20% increase - when special damages were removed from the calculation of the limit. Any increase should be based on inflation since 1999 and use the Consumer Price Index measure of inflation, rather than the Retail Price Index measure.

· Finally, we question the scope of the proposed small claims limit changes and in Part 1 of the bill. The puported justification for the proposals is to tackle so-called fraud in whiplash. Yet the government’s plans would also bring within their ambit areas of personal injury for which there is no evidence of fraudulent activity. Vulnerable Road Users is one example of this and the government has rightly made concessions at second reading. However, injuries sustained by workers in the course of carrying out their duties is another area where there is no threat or evidence of fraud, yet working people, including those who drive as part of their duties, would also be caught up by the new regime and denied access to justice as a result. We therefore urge the Bill Committee to pay due consideration to amendments which exempt workplace injuries from the scope of the bill and associated changes to the small claims limit.

· We urge the Bill Committee to pay serious consideration to amendments which would see the proposed changes to the small claims limit, their scope and the basis upon which they are being proposed, put on the face of the bill so that they can be properly scrutinised and made accountable to parliament.

2.0 About Thompsons Solicitors

2.1 Thompsons is a UK-wide law firm with a network of offices across the UK, including the separate legal jurisdictions of Scotland and Northern Ireland.

2.2 As the largest trade union and personal injury law firm in the UK, we specialise in personal injury and employment law for trade union members, their families and private clients. At any one time we will, as a firm, be handling over 30,000 cases.

2.3 The firm participates regularly in consultations and calls for evidence on a wide range of issues relevant to our clients and in order to ensure that the perspective of the injured claimant is heard by the government and in parliament.

3.0 Main submission

3.1 The government has refused to allow the small claims limit proposals onto the face of the bill despite their extensive ramifications for injured people. The increase in the small claims limit (from £1,000 to £2,000) in all cases fails to take into account (adequately or at all):

A) Inflation (CPI would put it at less than £1,500);

B) The impact on workers and others whose accidents have nothing to do with whiplash or fraud;

C) Injured people being (as per Lord Justice Jackson) in an "asymmetric relationship" with insurers and workers being less likely to pursue a claim against their employers when they have no legal help;

D) The risk of increased accidents at work as result of employers, facing reduced legal action, taking health & safety less seriously;

E) An annual loss to the NHS of £6m and to the Treasury of £140m; and

F) Extensive recent criticism of the proposals from the Justice Committee.

We discuss these points below.

Access to justice

3.2 The government maintain [1] that if they increase the small claims limit as proposed, a claimant will still have ‘access to justice,’ however access will be via an online system being developed by insurers [2] . Claimants will either not have the advantage of free legal advice as at present or, should they seek advice, they will have to pay for that advice out of their damages. This approach to legal representation ignores the asymmetric relationship between the parties in personal injuries litigation noted by Jackson LJ [3] .

3.3 We do not believe (as the government suggests) that 75% of cases will be run by injured people on their own, without legal support, given that:

A) When fees for employment tribunals were introduced, there was an up to 90% decline in the number of workers pursuing a claim; and

B) When the union Unison surveyed its members, 63% said they "would not have proceeded or been at all confident to bring their claim without legal representation".

3.4 Based on this we estimate that c350,000 injured people will be put off pursuing a claim for an injury that was not their fault .

3.5 Even if injured people did decide to run cases on their own, there would be significant risks that an already overburdened civil court system would be unable to cope with the number of injured people attempting to run their own cases as litigants in person.

Basis for a small claims limit increase

3.6 Inflation is the reason given by government for increasing the small claims limit in non-RTA cases to £2,000. In their response to the consultation they say:

In addition, having considered the submissions of stakeholders in relation to non-RTA PI claims, the small claims limit for all other types of PI claims will be increased to £2,000 in line with inflation.

3.7 But, in fact, this proposal has no inflationary or other logic. Jackson LJ in his 2009 Review of Civil Litigation Costs set out the position clearly. At paragraph 3.3 of chapter 18, he stated that:

If a satisfactory scheme of fixed costs is established for fast track personal injury cases (both contested and uncontested) and if the process reforms bed in satisfactorily, then all that will be required in due course will be an increase in the PI small claims limit to reflect inflation since 1999. A series of small rises in the limit would be confusing for practitioners and judges alike. I therefore propose that the present limit stays at £1,000 until such time as inflation warrants an increase to £1,500.

No reason has been given by the government to depart from this conclusion.

3.8 The question therefore, to follow Lord Justice Jackson’s lead, is whether inflation warrants an increase to £1,500. The short answer is that it does not.

3.9 Jackson LJ correctly set 1999 as the starting point for the calculation of the impact of inflation, because that is when special damages were removed from the calculation of what cases fall within the small claims limit and it was re-set at £1,000 for general damages only [4] .

3.10 Inflation calculators [5] dealing with price changes from 1999 to the present day show that £1,000 would now be worth either £1,481.79 applying CPI or £1723.99 based on RPI. Applying CPI and the recommendation in the Jackson Review would mean no increase is justified at this time. Applying RPI would mean an increase to £1,500. Whichever is applied, there is no justification for the £2,000 proposed. Given that the government applies CPI to the pensions and benefits paid to injured workers pursuing EL claims, the logic must follow that if there is to be any increase the same measure should be applied to the small claims limit applicable to those claims.

3.11 We argue that, as in Scotland with the introduction of the Simple Court Procedure in September 2015 [6] , workers injured on duty should be excluded from the proposed new RTA small claims limit and from the scope of the Civil Liability Bill.


3.12 These measures are being put in place to supposedly deter fraudulent claims. However, the insurers have failed to provide any objective evidence of fraud on anything like the scale they have suggested.

3.13 The figures put forward bear no relation to our experience where fraud is an issue in less than 1% of cases (and in those cases we refuse to act at all or any further).

3.14 Rob Townend of Aviva in his evidence to the Justice Select Committee in March 2017 referred to figures of £800m in detected insurance fraud and a total of 70,000 cases. [7] Yet James Dalton, the ABI director of general insurance policy, when asked by the Committee if he could say how many such cases had actually been proven before the courts answered "no."

3.15 The power is in the insurers’ hands to refuse to pay out if they think a claim is fraudulent or exaggerated. Better still, they can report their suspicions to the police. Yet recent figures show that insurers pay out on 99% of all motor claims [8] . Rather than clear up their own systems to root out questionable claims, insurers are encouraging government to reform the compensation system in a way that will hurt all injury victims, including those injured at work.

3.16 In seeking to tackle fraud (an independent definition of which doesn’t exist [9] and the numbers for which as used by the government are based on insurance industry statistics [10] ) the changes sweep up all claims whoever they are made by and subjects them all to a new less favourable regime - including workers, [11] regarding whom there have been no suggestions of fraud.

3.17 The small claims limit increase is not on the face of the bill and attempts in the House of Lords to bring it into scope by amendment have been rejected. For all the reasons set out above, we therefore recommend that the Bill Committee advances any amendment which enables the proposed measures to be subjected to proper parliamentary scrutiny.

September 2018

[1] Letter from Lord Keen of Elie to Peers regarding issues raised during the Second Reading of the Civil Liability Bill, April 2018, page 2, paragraph 1

[2] Letter from Lord Keen of Elie to Peers regarding issues raised during the Second Reading of the Civil Liability Bill, April 2018, page 2, paragraph 3

[3] Review of Civil Litigation Costs: Final Report, LJ Jackson, chapter 19, paragraph 1.3

[4] Small Claims Limit for Personal Injury Report, 2018, Justice Committee, chapter 3, paragraph 44

[5] E.g. ;


[7] Prison and Courts Bill, Committee Stage

[8] Association of British Insurers – ‘Lifting the bonnet on car insurance’

[9] Insurance Fraud Taskforce final report, January 2016, p.36

[10] Insurance Fraud Taskforce final report, January 2016

[11] Civil Liability Q and A p.1


Prepared 12th September 2018