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Daily Insurance Industry News
Friday 19th of January 2018
February 24, 2012

Personal injury legal fees cost UK motorists £2.4m a day

by Gill Montia

Story link: Personal injury legal fees cost UK motorists £2.4m a day

Unaffordable, unsustainable and unacceptable legal fees in settling motor personal injury claims now cost UK consumers £1,666 every minute, according to the Association of British Insurers (ABI).

The ABI claims that UK consumers are paying £2.4 million a day through their motor insurance premiums, to cover legal fees incurred in settling low-value motor personal injury claims (up to £10,000).

On top of this, legal costs often exceed compensation payments. For example:

One insurer’s average claimant legal costs in 2010 represented 142% of the sums received by injured victims.

A recently reported compensation claim for a work-related injury for £12,750 settled out of court attracted legal costs of £74,000.

A legal bill of £37,250 was run up in settling a claim for £15,000 in respect of injuries sustained by a woman who fell into the moat at a castle (source: National Trust).

Between 2004 and 2011, there has been a 5% rise in NHS legal costs, but a 130% increase in claimant legal costs.

Speaking yesterday at the “The Future of Casualty Claims” conference, James Dalton, the ABI’s Head of motor and liability insurance said: “The Government must press ahead with the much-needed reform of our dysfunctional compensation system, which, together with the ban on the selling on of personal details of potential claimants, will enable solicitors’ fixed fees to be reduced to more realistic levels.”

He added: “Lower legal costs will help bring down the cost of motor insurance for all drivers.”

 

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