The Chancellor has today (Wednesday 25 November 2015) outlined yet another attack on injured people’s ability to get representation and proper compensation by announcing a rise from £1,000 to £5,000 in the small claims limit in cases arising from car accidents.

The measure will mean that the majority of people injured in road accidents – regardless of the type of injury – will not have access to legal representation.

The government claims this will save the motor insurance industry £1bn per year but gives no evidence to support this, explain how it will protect the rights of the majority of genuine accident victims or ensure any savings are not used to boost profits and dividends.

“Motor insurance in the UK is compulsory and is a £26bn industry and insurer profit is going through the roof. This latest move, justified on the back of spurious self-serving statistics from the insurance industry itself, will hit those who most need the damages and who are least able to represent themselves or pay privately for legal advice,” said Tom Jones, Head of policy at Thompsons Solicitors.

“Most road traffic accident personal injury claims are worth less than £5,000 meaning that the rise in the small claims limit will leave the bulk of injured people out in the cold. The increase in the limit bears no relation to any objective measure, if it were based on inflation it would be £1,500. The fact that it is proposed to be £5,000 shows this for what it is - the government once again dancing to a tune played by their friends in the insurance industry, boosting their profits at the expense of injured people. If the issue is fraud then there is a simple answer – don’t pay out and report it to the police not hand out a collective punishment for all injured people.

“Despite data from the Association of British Insurers showing that the cost of claims has fallen by 29% annually since 2010 - hands up who has seen their insurance premiums fall? If these reforms go through, there is no evidence at all that they will pass on savings to motorists but, as evidenced by Direct Line Insurance shares hitting a record high today on the back of the Chancellor’s announcement, it’s going to be boom time for insurers and their shareholders.”