The personal injury claims market has come under scrutiny recently with recommendations by Government ministers for changes to the current system. Prime Minister David Cameron has also become involved having just completed a summit with top insurance companies.

Drive to reduce costs
The Prime Minister has gone on record to state his intention to ensure a reduction in the fees paid to solicitors and in particular the fees paid in relation to small personal injury claims. This is an important element in keeping insurance premiums under control which have seen significant increases recently.

The insurance industry has welcomed the initiative stating that any reduction in the overall costs of injury claims will help to reduce premiums and that they will pass the savings on to consumers. They also committed to establishing stricter procedures for checking and vetting personal injury claims in general and whiplash and safety related claims in particular.

Counter claim
The Law Society has argued that part of the reason insurance premiums have risen so sharply is not because of legal fees but because of the actions of insurance companies. This has included the now roundly condemned practice where insurance companies were supplying accident victims’ details to personal injury claims solicitors to earn a referral fee. The Law Society also highlighted the important fact that over the period of rising premiums, insurance companies’ revenue from premiums far exceeded insurance payouts enabling them to reward their shareholders.

Right to justice
Reducing costs within the legal process and reversing any drain on the public purse are important drivers in the Government’s approach to this issue.

Concern has been raised however that the clamor for efficiency and cost reduction may affect the public’s fundamental right to access to justice regardless of their means to pay.

The no win no fee system which currently operates for injury claims was introduced to replace the old legal aid system and by all accounts functions effectively in achieving its objectives. If solicitors fees are curtailed and success fees either capped or even phased out then this could result in no win no fee solicitors cherry picking and shying away from the smaller or marginal cases.

A no win no fee arrangement basically means that the solicitor’s fee is only payable if the compensation claim is successful. Claimants therefore do not have to fund up-front fees and find ways of financing their claims.

These changes to the system could cause genuine claimants to be disadvantaged and reduce the effectiveness of the no win no fee system. It is important that no win no fee solicitors are not put in a position of having to make commercial decisions that may affect an individual’s fundamental right to justice.

Additional proposals
The second part to the Government’s proposals is to reduce the red tape and bureaucracy surrounding health and safety. The insurance industry have also been criticised on this front as many UK businesses have complained of having to go beyond minimum legal requirements in order to satisfy criteria form insurance companies to secure insurance cover.

The top insurance companies have now agreed to issues standard guidelines and operating procedures to provide a consistence approach to health and safety requirements.

There are many issues to address here and the Government must seek advice and consensus from all parties concerned to ensure an effective and practical solution to the problem.

Personal Injury Solicitors are specialists in personal injury claims and operate on a no win no fee basis. For more information on injury claims call us now on 0845 544 1794. If you found this article useful visit our website at www.personal-injury-solicitors-london.co.uk and give us a ‘like’.