RAC slates proposals to raise small PI claim limit to £5,000

The RAC has hit out at recent proposals to raise the ‘small claims’ limit for personal injury work to £5,000.

RAC Legal Services head Jonathan Gulliford said the plans, outlined recently by the Lord Chancellor, Lord Falconer, will seriously affect many people claiming compensation for injuries. “Raising the small claims limit is throwing the baby out with the bathwater,” he said.

Currently, a ‘small claim’ is £1,000 or below.

Gulliford said that presently insurance companies will put in a low offer of compensation, and that without legal advice many victims do not understand the process of claiming for compensation. In 60 per cent of cases handled by the RAC’s 24-firm legal panel, value is added to a claim by rejecting the first offer of compensation.

“People need the help of lawyers to understand what their rights are and how to push the process through,” said Gulliford, adding: “£5,000 is a lot of money for a lot of people.”

Gulliford said that, in the RAC’s view, raising the small claims limit will not eliminate false claims being made. “It will lead to more spurious claims being made because lawyers aren’t sifting them,” he said.