Recent media coverage on legal fees relating to personal injury claims has not told the full story.
A radio report broadcast on 25 March painted solicitors as the villains of the piece, pocketing 40p for every pound of awards granted to claimants in personal injury cases. This figure is a cause for concern and springs from inefficiencies in an overly complex process that involves claimant and defendant solicitors, insurance companies and numerous expert witnesses, as well as the courts.
The ABI has been pro-active in bringing out reforms that will address the chronic issue of rising legal costs, which has been fully endorsed and supported by firms such as ours.
Having contributed to the consultation last summer on proposed reforms in this area, we – and the ABI – are frustrated by the government’s lack of progress of this important reform for which all responsible law firms are crying out.
Browne Jacobson, a defendant firm, already works closely with its clients to speed up processes and cut costs, and we are continuing to seek new ways of achieving this aim.
In analysing the source of costs in personal injury cases, the vast majority of expense comes from claimant solicitors. While many claimant solicitors behave responsibly in handling their clients’ claims, a few appear not to, and their conduct leads to significant delays and costs.
Research published by the Civil Justice Council in 2007 showed that a significant number of claimant solicitors were taking advantage of a loophole simply in order to recover increased costs in low value road traffic accident claims .
There is currently little or no incentive for them to monitor and manage the time and expense invested in even the smallest personal injury case.
An efficient method for resolving claims at low cost already exists in the small claims process, however this applies only to personal injury claims under £1,000. The bar is set far too low here, creating a market of low value claims where legal fees can grow out of all proportion to the final damages figure. This is the crux of the matter.
Granted, the yet to be approved reforms in this area present challenges to the legal profession, but we are far from unwilling recipients of such reform. A system that allows claims to be settled more quickly and efficiently can only benefit the claimant and the insurance industry.