Conditional fee agreements (CFAs) have fuelled an 87% increase in the number of claims against local authorities, according to research from Zurich Municipal and the Local Government Association (LGA) ...

Conditional fee agreements (CFAs) have fuelled an 87% increase in the number of claims against local authorities, according to research from Zurich Municipal and the Local Government Association (LGA).

The survey also highlighted a rise in the level of fraudulent claims. It found 68% of local authorities suffered a rise in the number of fraudulent claims over the past fouryears.

The survey agreed with insurers' concerns that CFAs were fostering the rise of claims management companies; 96% of local authorities said that lawyers were encouraging people to make claims.

CFAs have become a source of dismay for insurers who claim they have increased the legal costs of claims. The system, which replaced legal aid in 1999, means that insurers foot the legal bill if they are unable to successfully defend a claim.

Zurich Municipal director of sales and marketing Clive Moulson said: "The survey confirmed CFAs are causing the number and cost of claims against local authorities to spiral."