Insurers paying out £3 in legal fees for every £1 in compensation to claimant, trade body says

Claimant lawyers and claims management companies are “increasingly cashing in” on industrial deafness claims, the ABI said.

The insurer trade body said that after last year’s cut in fixed legal costs in the Claims Portal for settling personal injury claims, there is “growing evidence” that claimant law firms are turning their attention towards industrial deafness claims, which attract “substantially” higher legal fees.

The ABI said the average legal fee for settling an industrial deafness claim last year was £10,500, compared with £500 for a whiplash claim settled through the Claims Portal.

The association added that as the average compensation award for industrial deafness was £3,100, insurers are paying £3 in legal fees to lawyers for every £1 paid in compensation to the claimant.

Speaking at the European Forum on Claims Management, ABI head of motor and liability James Dalton said: “Industrial deafness claims are fast becoming the new cash cow for claimant lawyers, eager to make up for last year’s reduction of fixed legal fees in the Claims Portal.

“With lawyers typically pocketing three times the amount of compensation paid to the claimant, the rise in industrial deafness claims shows that claimant lawyers are keeping the compensation culture alive and well.

“Insurers are here to pay fair compensation to genuine claimants. But we need to tackle the increasing number of industrial deafness claims by ensuring that claimant lawyers’ excessive legal fees are made more proportionate.”