Small claims changes – another attack on workers’ rights

05 Dec 2016, By Hugh Robertson

The Government are planning to change the rules for compensation claims that would make it much more difficult for workers to get the money they are entitled to when their employer’s negligence injures them or makes them ill.

When compensation claims go to court, some of them are deal with as “small claims”. If a case goes down this route, in most cases, the court will not order solicitors’ costs to be paid by the losing party, so if you instruct a solicitor you will have to pay the costs yourself. For this reason most claimants take a small claim without the help of a solicitor.

The kind of claims that can be taken using the small claims route are from people who are wanting compensation for goods like cookers or televisions that have broken or for a faulty service such as by a plumber or dry cleaner. The limit for claims handled as “small claims” is £10,000 in England and Wales (it is lower in Scotland and Northern Ireland) and the process is intended for straightforward claims where both sides can go ahead without the need for legal advice.

Some other claims including ones where workers are injured or made ill have a small claims track but it can only be used for cases where the claim is for less than £1,000. The reason for a lower limit for workers compensation claims is because all employers have to have insurance against any claims so if a claim is taken by a worker against their employer it is effectively against the insurance company. Often these cases are complicated because of the worker needs to show negligence, but also insurance companies always use a solicitor. That is why the majority of workers personal injury claims are taken through trade unions, who provide a lawyer to deal with it. Where a worker wins, the insurer pays their legal costs so the worker is not out of pocket.

The Government is now looking at changing that. There is a consultation underway on whiplash injuries which can happen in motor accidents. They want to cap compensation for these cases from the current average of £1,850 to a maximum amount of £425 and also raise the small claims limit for these cases to £5,000. Now this may seem a bit odd given that no whiplash claim will be over £425 but tucked away in the document is a much bigger proposal. They want to raise the small claims limit for all claims, including workers personal injury claims to “at least” £5,000.

The Government consultation paper gives no valid reason for increasing all PI claims. It simply states “Raising the small claims limit for all PI claims would be consistent with the government’s aims to disincentivise minor, exaggerated and fraudulent claims and remove unnecessary costs from the claims process”, however there have never been any suggestion that there are a significant number of fraudulent compensation claims from workers, even from the insurance industry and in the vast majority of cases that go ahead with the help of a union and solicitor the worker wins. There is certainly no evidence that there is a “compensation culture” for workers compensation claims. As a TUC report showed, only one in seven workers made ill or injured through work gets any compensation at all. Also, the number of claims has fallen dramatically over the past fifteen years. According to statistics from the Compensation Recovery Unit (CRU), in the period since the earliest comparable figures were published (2002), the number of claims from workers against their employer have fallen from 183,342 to 103,401.

The Government even accepts the arguments against raising the limits. The consultation paper states “A number of EL and PL (public liability) claims, as well as clinical negligence claims, are more complicated than low value RTA related soft tissue injury claims, for example because causation and liability may be in question. In addition, claims where there are multiple minor injuries can be complex and unsuitable for the small claims procedure.”

This is simply an attack on the ability of workers to get justice after they are injured or made ill by their employer’s negligence. If all claims up to £5,000 were to be heard through the small claims route then the injured worker would have to choose between not taking a claim, taking a claim without representation, or employing a solicitor in the knowledge that the costs would leave them with very little or may even exceed any compensation they get. Unions reckon that around 60% of their cases would be effected, but in some unions with lots of low paid members they estimate it could be up to 80% of claims.

Claims under £5,000 are not “minor” and can include partial amputation of a finger or an injury that could have led to the worker being off work for several months. It will impact greatest on the lowest paid workers who are least able to afford losing several thousand pounds and for whom £5000 could be almost six months’ pay.

This is an appalling attack on workers and will mean, not only will tens of thousands of injured workers be denied justice, there will be far less incentive on employers to make sure that these injuries and illnesses do not happen.