Group of legal expenses insurers form breakaway lobby group
A newly formed legal expenses trade body is threatening to create a rift in the ABI over its proposals for reform of the compensation system.
The Legal Expenses Insurance Group (LEIG) is attacking the ABI for ignoring the legal expenses providers in favour of the larger liability insurers.
The LEIG represents seven legal expense providers, including industry giant and ABI member DAS Legal Expenses.
It argues that the ABI's proposal to increase the small claims limit to £5,000 best serves the interests of liability insurers rather than the consumer.
Claimants are not entitled to legal representation for claims under the small claims limit.
LEIG director Tony Baker said: "The ABI is lobbying on behalf of the liability insurers. The ATE market is not being listened to. From the ABI's point of view you can't blame them because liability insurers will pay a bigger membership fee."
The small claims limit currently stands at £1,000, meaning that the majority of claimants will be represented by a lawyer. Insurers argue that the limit, which has not been raised since 1990, should be adjusted in line with inflation.
Baker said: "Raising the limit would have a disastrous impact on the number of people making a successful claim and how much they receive as a reward. People need expert advice."
An ABI spokesman responded: "We represent a broad membership, and offer equal support to all our members. A lot of compromise is needed in the market. What we are trying to do is improve the way the compensation system works for everyone."
The future of the ATE industry is currently hanging on the ruling in Rogers v Merthyr Tydfil, which could see ATE premiums slashed.
