Insurers could see claims costs slashed under far-reaching proposals to reform litigation funding proposed by the Civil Justice Council (CJC) this week.

The CJC report, Improved Access to Justice and Proportionate Costs makes recommendations to streamline the compensation system.

Experts predicted the proposals would lead to insurers' legal bills being cut in injury claims.

Legal costs currently make up around 40% of insurers' personal injury claims costs.

The recommendations could be incorporated into the government's Compensation Bill due to be debated in November.

Proposals to increase the fast track limit for all personal injury claims to £25,000 from £10,000 are expected to be the main catalyst for reducing insurers' legal bills.

AXA claims technical manager Graham Plumb said: "Undoubtedly this will benefit us in helping to set costs estimates and help drive down legal bills."

He said the proposal would "significantly" increase the amount of claims fast tracked.

The fast track provides a quicker, less costly route, to handle lower value claims.

The CJC also recommended medical reports and police reports in fast tracked cases should be charged at a fixed rate.

It concluded that a 'costs council' should be established and charged with setting and overseeing the fixed fees.

Past president of the Forum of Insurance Lawyers (Foil) Claire McKinney said if implemented the proposals would "contain costs". and introduce predictable pricing.

CJC recommendations
There are 21 recommendations proposed by the Civil Justice Council, including:

  • Starting point for recovery of costs in personal injury claims below £5,000 should remain at £1,000
  • Increasing fast track limit to £25,000 from £10,000 on all personal injury claims with an "opt-in" fast track scheme for cases of up to £50,000
  • Claimants' lawyers to obtain medical report at a fixed fee
  • Consideration should be given to contingency fees for group actions.
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