There is little prospect that an increase in the small claims limit will reduce the number of fraudulent claims, Thompsons says.

In its response to the government consultation 'Reducing the number and cost of whiplash claims' the firm says that far from putting off someone intent on pursuing a fraudulent claim, the prospect of having to use the small claims tract will provide “further incentive to pursue the claim because they will be running a lesser risk in that they won’t have to pay costs if they fail to satisfy the court of the claim.”

Tom Jones, head of policy and public affairs said: “What this proposal does is provide insurers with an incentive to allege fraud without foundation in order to stop genuine claims – they will be able to do so with impunity against unrepresented claimants. Deciding if there has been fraud should be for the courts based on the evidence provided by insurers, not for the insurers to allege without evidence.

“The proposals in this consultation will reduce the numbers of genuine whiplash and road traffic accident personal injury claims as people injured through no fault of their own choose not to represent themselves, or decide they will lose such a significant proportion of their damages as to make pursuing a claim not worth while.

“These proposals are being driven by insurers and hit entirely the wrong target. They impact on genuine claimants while doing nothing to tackle the actual problem.”