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Chancellor Announces Plans For Small Claims Limit

Small Claims LimitThe Autumn Statement released by Chancellor George Osborne could see innocent passengers that fall victim to road traffic accidents unable to seek the legal advice they need to gain compensation for their injuries.

The proposal would see the small claims limit increased from the current £1,000 to £5,000, essentially cancelling out any claim below the £5,000 threshold, in a bid to save insurance companies money, which they say they will pass [these savings] on to motorists.

In his speech last week, the chancellor said: "We're going to bring forward reforms to the compensation culture around minor motor accident injuries."

"This will remove over £1bn from the cost of providing motor insurance. We expect the industry to pass on this saving, so motorists see an average saving of £40-£50 per year off their insurance bills."

Law Society President Jonathan Smithers is 'gravely concerned' the proposals could stop compensation payments for road traffic 'minor' soft tissue injuries.

"[The proposals] will completely undermine the right of ordinary citizens to receive full and proper compensation from those that have injured them through negligence," he said.

"These proposals will stop people obtaining legal advice for all personal injury claims below £5,000 and stop people claiming for often debilitating injuries arising from road traffic accidents if these injuries are considered minor."

In addition, Slater + Gordon (S&G), who make up 80% of their revenue through road traffic accident claims announced a large drop in their share price following the chancellors announcement.

Michael O'Hara, 01 December 2015

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