Injury Claims Force Insurance Prices Up For All

The Association of British Insurers (ABI) have done their sums and personal injury claims are now costing UK insurance customers £2.4,000,000 every day in legal fees. That’s the fees that go to the solicitors and lawyers who fight the cases, not the compensation that is actually paid out to the injured party, that’s often considerably less than the lawyers receive in compensation for their time and expertise. One example that the ABI point out that legal costs, in 2010, were 142% of what was awarded to claimants in damages and compensation. In a recently reported case somebody who won their case for a work related injury was awarded £12,750 in compensation while their legal team walked away with seventy four thousand pounds.
Injury Claims Force Insurance Prices Up For All
The ABI further point out that the NHS’ legal costs have risen five percent in the five years up to 2011 whereas the increase in claimant costs has gone up by as much as one hundred and thirty percent and in the financial year ending in 2011 the NHS paid £257m in fees to lawyers following claims from patients.

James Dalton, speaking as head of motor and liability insurance at the ABI claimed that: “"Since being introduced in 2010 the fast-track process for settling low-value personal injury cases has led to quicker compensation awards,” although he still fees that the fixed costs that go with the system are too high.

He goes on to say that: "The United Kingdon's compensation process is riddled with disproportionate and excessive legal costs” which leads to higher insurance costs and increases the financial burden on local authorities and the NHS.

There are plans to reform the compensation system along with a proposed ban on selling the details of people who have been involved in crashes by insurance and breakdown recovery companies. Bringing down the high fees that are charged by lawyers will mean that the savings are passed on to the taxpayer and insured drivers alike.

It may seem puzzling that the legal advice is worth more than the amount of compensation the claimant receives, this is because the costs are awarded extra to the compensation claim. That is to say someone who tripped and fell thanks to the negligence of another may be awarded £5,000 for example. However, the judge would also award the losing party to pay costs meaning that they have to pay for both legal teams’ time and expertise. If the legal team was expensive or there was some question over the circumstances of the accident and the case lasts more than a few days then the costs can grow out of any proportion to the amount that was awarded as compensation. And of course the losing party won’t pay their fees themselves, they will have taken out insurance against losing the case.

So, while having the right to claim if you’re the victim of an accident is a good thing forcing down the amount that is awarded in costs will also benefit us all in the long term.

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