The Association of British Insurers claim that the legal fees connected with personal injury claims were not the sole reason for Britain’s exorbitant and unacceptable car insurance costs. In the very recent conference that was held in London namely, ‘The Future of Casualty Claims’, the ABI has revealed figures which contribute to the current situation that we have regarding our car insurance industry.
According to their report, one insurance company’s average injury claim in 2010 alone was able to equal 142 % of the sum that was received by personal injury victims. In addition to this, the most common financial scenario in a compensation claim case would be more than £70,000 in lawyer’s fees when the amount being fought over is just a £12,000 work-induced injury.
James Dalton, representative of the Association has stated that, “Ever since the establishment of the fast-track process for making a personal injury claim, there have been numerous and significant compensation pay-outs.”
“Britain’s compensation system is much too riddled with unstable and excessive lawyer’s fees, which most commonly exceed that of the amount being fought out in court. This would only spell out in higher insurance costs for drivers and businesses while the financial burden lies heavy for local authorities and the National Health Service”.
“The government very well needs to press forward with their plans on reforming our dysfunctional injury compensation system. By enforcing the ban placed on legal fees and referral fees, fixed lawyer’s fees will be lowered to realistic levels. And, with lowered costs for lawyers, car insurance premiums for British motorists will also be eventually enforced”.
A few months ago, The Daily Mail released a lot of information that ridiculed the compensation system and made insurance companies and insurance policyholders alike question the system. After stating that the daily average for compensation claims in the UK was at 1,500, the UK was immediately dubbed as the ‘Whiplash Capital’ of Europe.
With these controversial occurrences, the government has finally taken a step towards transforming the current climate within the car insurance industry. With plans to reduce lawyer’s fees and place them on a fixed rate basis, there is a great hope that whiplash claims will finally be outlawed. Apart from this, the government will also start requiring drivers and personal injury victims to undergo two supervised medical examinations to start weeding out bogus insurance claims from the legitimate ones.
