Recent Research carried out by the Association of Personal Injury Lawyers indicates that Motor Premiums have hit record high despite claims reaching a record low.
On 24th July 2022 Which published an article stating that Comparison sites are saying that car insurance is on the rise.
On 30th March 2023 Consumer intelligence produced an article on their website which stated that
“average quoted cost of car insurance hits £929 with Londoners quoted the most at £1419 and motorist in the South West quoted £576“
So, what is going on? Why are premiums going up not down as we were promised despite the drop-in claims?
The insurance industry seems to have the government’s ear in that during the life of this government they have petitioned the government to reduce the amount of money for whiplash compensation claims in a bid to reduce fraudulent claims whilst saying that access to justice must be preserved. No-one wants fraudulent claims to continue but now everyone is being punished for a few bad apples.
The reduction in premiums does not appear to have happened.
The knock-on effect is that many personal injury law firms have been unable to continue helping personal injury claimants as it is uneconomic for them to do so on a cost benefit basis. That means that the fees the Solicitors would have to charge their clients would make it uneconomic for the personal injury claimant to use a Solicitor to assist them. Many firms have either closed their personal injury departments and gone out of the market or gone bust as a result.
At the same time the amount recovered for Whiplash has gone down drastically meaning that there is less for the insurance companies to pay out. The amount of lawyer’s fees is fixed at an all time low for such claims which means that it is uneconomic for many lawyers to help these claimants to obtain their compensation so they are faced with having to deal with the insurance company direct without any legal assistance.
How can this be fair?
When someone has been personally injured through negligence why should they face the double whammy of having to face a legal qualified insurer whose only duty it to their shareholders rather than to the injured party rather than having a personal injury solicitor to fight their corner? Is this really justice?
As a personal injury solicitor who has been in the business for 30 years the changes make me very sad as access to justice is being eroded all the time.
Extension of fixed costs
This government now wants to extend the fixed amount that the insurance companies have to pay in legal costs for claims to claims with a value of up to £100,000 meaning that many solicitors’ firms may leave the market as it is uneconomic for them to continue to represent injured claimants.
The extension of fixed costs means that the insurance companies will pay a fixed fee in compensation no matter how much work the personal injury Solicitors has to do to be successful in their claim.
What is not very well published is that there are already controls in place to ensure that legal costs are not excessive. The amount the personal injury Solicitor receives can be heavily scrutinized by the court and if the court believes the amount is excessive or not in proportion to the amount of compensation received, then the Court will reduce the amount the Personal Injury Solicitor receives in legal costs for the work they have done and the amount the insurance company will pay in legal costs.
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