ABI alerts about the high legal costs in personal injury claims

According to an independent survey commissioned by the Association of British Insurers (ABI), for every £1 paid in compensation, on average an extra 50p is paid out in legal fees. The ABI survey showed that the most important factor in making a low value personal injury claim was simple claims process.

The Civil Liability Bill which is anticipated to come into effect in 2019 will increase the Small Claims Track Limit from £1,000 to £5,000 for road accident personal injury claims, and from £1,000 to £2,000 in other personal injury claims, thus increasing the threshold for getting legal representation for personal injuries.

The ABI survey showed that most of the motor insurers have publicly expressed their commitment to passing on cost benefits to customers if the reforms are implemented in full.

Much criticism has been made against the proposed reforms, one of the main arguments being that the reform would limit the rights of injured parties making valid claims for personal injuries. However, Chris Philp, brought an example uncovered by The Sunday Times in July 2015, which involved a company called Complete Claim Solutions systematically encouraging members of the public to submit fraudulent claims, one of it its salespeople even being recorded boasting to a Sunday Times journalist that he was able to easily persuade the public to lie saying:

“If they want that £2,000, they’ll lie.”

“When it comes down to a woman who’s had an accident…I’ll make her cry” as a way of persuading her to make a claim.