What is a ‘small claim’?
The small claims limit of £5,000 refers to the injury. If an injury is worth less than £5,000 but the financial losses bring the total value of the case over £5,000 it will still fall into the small claims track. The entire value of the case (i.e. including financial losses) needs to be over £10,000 to fall outside of the small claims provisions if the injury alone is not worth over £5,000.
For instance, let’s say I fracture my collar bone and the value of my injury is £4,500. In addition I am unable to work and lose out on £3,000 earnings. I also write off my bicycle, which was a brand new Cannondale SuperSix EVO Ultegra rrp £2,099 (spoiler: not my actual bike).
Financial losses £5,099
The injury alone is worth under £5,000 so the case falls within the small claims limit unless the total value is over £10,000. This is not so the case would fall in the small claims track.
What happens when a case falls in the small claims track?
The key difference with a case in the small claims track is that you would not receive any legal fees from the defendant – even if the case wins. This means that law firms will not be able to take on most cases. It is anticipated that firms will be charging an injured person 40% of their damages if they do take a case on.
In the future, insurers have no incentive to act reasonably to keep the injured person’s legal costs down as they will not have to pay them – even if they drag a case all the way to court. The benefit to them is that it will take longer until they have to cough up the money and many injured people will give up in the meantime. Also, without solicitors acting, many people will not know what their case is worth or what they are entitled to, so insurers will be able to settle for less than the full value.
In addition, to get damages the injured person will need to get medical evidence in the form of an independent report. This costs around £200 for a GP report. An orthopaedic report is needed if there is a fracture, and the cost will be around £500. Currently law firms pay these costs but if a person is not represented they will need to pay this themselves as the case goes on. Many people may not be able to afford this and will have to go without recompense. Other people may pay the cost, mistakenly believing that they have a good case, and will lose at trial.
I commented on the consultation in Cycling Weekly last month and in the comments it was suggested that the effect would simply be that claims are inflated to hit the £5,000 threshold. Unfortunately, this betrays a lack of understanding of the way the law works as the value of cases is quite specific.
A minimally displaced wrist fracture with a full or virtual recovery within up to 12 months or so is valued at £2,940 to £3,960 in the Judicial College guidelines. A soft tissue injury to shoulder with considerable pain but almost complete recovery within a year is valued at £2,050 to £3,630. The extent of the injury needs to be verified by an independent medical expert. Insurers are not famous for their generosity and they will not pay more than they are legally required to. Normally they do not even want to pay this amount.
Another misconception is that the slack will be pulled up by having membership of Cycling UK, LCC or British Cycling which include legal representation. This is not currently the case and “Cycling UK do not support these cases as legal costs cannot be requested from a 3rd party insurer, even if the case is successful. For this reason it is uneconomic for Cycling UK to fund small personal injury claims“. This is unlikely to change as the cost of paying lawyers to take on a case without a deduction would be unworkable.
Two tiers of justice
Under the new scheme, if someone suffers a soft tissue injury for 6 months in an accident at work they would receive £2,150 for their injury; someone suffering the same injury in a road traffic incident would receive £450 for their injury. In addition, the person injured in a road traffic incident will not have the same access to a legal representative.
It is an affront to access to justice for cyclists and other vulnerable road users to be worse off than people who are injured in other walks of life. Creating two tiers of justice depending on the mechanics of an injury is simply unfair – particularly given that the sole purpose of the changes is for a slight reduction in motor insurance premiums. It is also questionable as to whether the savings will actually be passed on to motorists.
The principle of the law is to put the injured person back in the position they were in prior to the incident occurring. Unfortunately, the changes mean that injured people will be significantly worse off financially and without the support of a lawyer to guide them through the process.