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Personal injury claims
[ch 1: pages 24-26]Most personal injury claims must be brought in the civil courts, although where personal (usually psychiatric) injury results from discrimination or harassment under the Equality Act 2010, a claim can be brought in the employment tribunal (see Chapter 7). Most employers are legally required to insure against liability for work-related injury or disease suffered by their employees (The Employer’s Liability (Compulsory Insurance) Act 1969).
The funding regime for personal injury claims in the civil courts was radically overhauled in 2013, under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). LASPO swept away its predecessor regime under which the funding of personal injury representation was run on a “no-win-no-fee” basis. Under this regime, claimant lawyers were only paid for providing legal representation if their client won their case. To cover the cost and risk of unsuccessful claims, the solicitors representing successful claimants were allowed to charge the losing party a percentage-based “success fee” on top of the cost of their work. In claims for work-related injury, the cost of this success fee was normally borne by the employer’s insurers.
In general, these rules worked effectively for claimants injured or made ill by their work, because they were able to access specialist lawyers at no cost to themselves. The LASPO regime undid this system by abolishing the “success fees” paid to a claimant’s solicitors by the employer’s insurer. Instead, an injured claimant must now pay up to 25% of their own compensation to their lawyer to fund their own legal representation.
The practical impact of these changes has been to reduce access to affordable legal representation for victims of workplace injury or illness, especially for “low-value” or very complex claims. But as Hugh Robertson, senior TUC policy officer for health and safety notes: “Although a claim of £3,000 or £4,000 may be considered to be low value by the government, it is not low value to a cleaner [on the minimum wage].”
Legal aid has not been available to fund personal injury claims since 2000.
Personal injury claims in the small claims court
Claims below a certain "value" must normally be brought in the small claims court, where each side pays their own legal fees and claimants are usually unrepresented. There is no provision for one side to pay the other side’s legal fees, even if a claim succeeds.
The small claims court limit for personal injury compensation cases is currently £1,000. The threshold is low because the court is designed for minor injuries that cause only short absences from work. However, the current government plans to raise the small claims personal injury limit from £1,000 to:
• £5,000 for all road traffic accident (RTA) claims for personal injury, including work-related vehicle accidents; and
• £2,000 for all other types of personal injury claim.
The government has sought to justify these changes on the basis of a need to “crack down” on fraudulent “whiplash” claims for road traffic accidents. However, these changes, if implemented, will impact on all injuries, including those at work, however caused.
Personal injury claims are often complex. They usually include the need to organise medical evidence. If these changes are made, the employer and insurer will continue to have ready access to high quality in-house legal advice and representation but injured workers will have to fund their own legal fees, instead of those fees being funded by the employer responsible for the injury. In a claim valued at £2,000, fees are likely to eat up most if not all the compensation. The alternative will be for claimants to represent themselves, in a claim against a multinational company with legal representation.
Union solicitors Thompsons estimate that this change will mean that over 90% of personal injury claims will be heard in the small claims court, whether the injury happens on the roads or at work.
In Scotland, similar proposals were rejected when research showed that they placed unrepresented personal injury victims at a significant disadvantage.
The Ministry of Justice originally intended to implement these reforms on 1 April 2019 but implementation has now been put back to April 2020.
For the latest developments, see Thompsons’ online campaign opposing the changes: #Feeding Fat Cats.