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“Ridiculous” to see higher small claims limit as answer to fraud, says ex-FOIL chief

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Hughes: exceptions in the small claims court rules

The suggestion that increasing the small claims limit will allow insurers to challenge more cases is “blatantly ridiculous” as district judges will allocate such disputes to other tracks, a former president of the Forum of Insurance Lawyers (FOIL) has argued.

Responding to the comments yesterday [2] of former Lord Chancellor Jack Straw that a £5,000 small claims limit be applied to all personal injury claims so they can be challenged by insurers, Anthony Hughes – chief executive of Manchester firm Horwich Farrelly – said they showed the same lack of understanding as that of the civil servants who drafted the consultation on whiplash and the small claims limit.

Mr Hughes, whose firm predominantly acts for insurers but also has a claimant arm, said: “There is a world of difference between a straightforward whiplash case and a potentially fraudulent whiplash case. Whilst fraud has been on the increase, thankfully it is still only the tip of the iceberg.

“The suggestion that increasing the small claims limit will allow insurers to challenge more cases is blatantly ridiculous. The small claims jurisdiction is for the most straightforward of cases… If Jack and the other civil servants thought to read the current rules surrounding the small claims court, they would see that there are various exceptions contained within the rules which allow cases on a value appropriate for the small claims track to be moved into one of the higher jurisdictions and therefore attract costs.”

Mr Hughes, whose firm received its alternative business structure licence [3] this week, added that he could not imagine a district judge in the land refusing an application from a claimant or claimant solicitor to take their case out of the small claims track based upon the complexity of the defendant’s argument if issues such as causation and fraud are being raised.

“Let’s not forget that it is not that long ago that cases involving low-speed arguments were automatically allocated to the multi-track until the actions of my partner Ronan McCann in Casey the put an end to that.”

Mr Hughes said that to read some of the rhetoric “you would think that insurers are not fighting fraud and taking cases to trial. My firm has cases in the courts every day of the week on these type of issues and win them regularly including groundbreaking cases where people have gone to prison for the action they have taken. If Mr Straw wants to make it easier for insurers to fight fraud that’s all well and good, but I’m afraid the small claims court isn’t the answer”.