People who suffer serious injuries at work could be forced to forgo compensation owed them due to changes in the small claims limit announced this week, MPs have warned.
The new Civil Liabilities Bill, which cleared its final hurdle on Tuesday to become an Act, raises the small claims limit from £1,000 to £5,000 (for road traffic injury claims) and to £2,000 for other personal injury claims.
It’s been called the ‘whiplash’ bill because it is intended to ‘reform the claims process for whiplash claims with injuries lasting up to two years resulting from road traffic accidents.’
However, it’s estimated that as many as 350,000 people will be deterred from making a claim each year, not just from road traffic accidents. Legal costs are typically not awarded in the small claims court, meaning working people would have to represent themselves or fund their case.
Richard Burgon MP, shadow secretary of State for Justice, said: “When legal fees are not covered, tens of thousands of working people will simply be priced out of obtaining legal assistance, resulting in many pulling, dropping or not pursuing their cases.”
“Of course, others, determined to secure justice, will fight on, but by representing themselves, at a massive disadvantage. An insurance company will be served by a legal expert fighting their case. The victim will be left to try to navigate a complicated legal procedure, placing greater pressure on our already overstrained courts.”
Labour MP Ruth George said the small claims court was not the right place to battle out often complex workplace injury cases.
“Particularly in employment liability cases at work, establishing who is to blame for an accident is far from simple.
“It is an extremely different sort of case from that of establishing whether a fridge was working or not when it was bought, or whether there is something wrong with a car.”
A drop in health and safety standards?
Usdaw (Union of Shop, Distributive and Allied Workers) went further, saying that standards of workplace health and safety will drop as a result of the Bill. “We know that the fear of legal action is one of the primary drivers for health and safety being a priority in the workplace.
“The projected massive fall off in the number of claims as a result of these changes will inevitably lead to a reduction in health and safety measures, as employers will let standards slip because they know they’re unlikely to face the consequences in court.”
Andy Slaughter MP for Hammersmith, quoting the Association of Personal Injury Lawyers statement said claims under £5,000 could include serious injuries such as ‘a brain or head injury, injuries to the eyes, a collapsed lung, or fractured cheekbones.’
“This is a disproportionate response to the stated aim of dealing with whiplash claims,” he said.
British Safety Council response
David Parr, Policy and Technical Services Director at the British Safety Council, said the bill amounted to denying workers access to justice: “Workers should not be prevented from pursuing redress whenever they sustain workplace injury or ill-health through no fault of their own simply because of financial limitations.
“No-one should be injured or made ill at work, but if they are, workers should have the support and agency to hold the employer to account, so that incidents do not reoccur.”
'Wolf of Wall Street' style companies
The government introduced the measures to crack down on ‘compensation culture’. Conservative MP Chris Philip said that the changes will help deter the financial incentives in the system whereby lawyers take a cut in payouts.
He cited the example of a claims management firm that was ‘such a disreputable organisation that it used the film "The Wolf of Wall Street" as an instructional video illustrating the kind of behaviour it considered appropriate.’
Government has also said the changes will help lower insurance premiums which it says have risen because of the high number of whiplash claims. It said each driver can expect to save about £35 a year.
The third reading of the Bill took place on 23 October and was approved by a majority of 56 votes. It now proceeds to consideration of amendments before royal assent.
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