Andrew Holt says the ABI should compromise over the use of lawyers in the compensation system
' Much hullabaloo was created around the ABI's revamping of the compensation system last year.
The Association of Personal Injury Lawyers (Apil) and the TUC came out fighting the threat of what they saw as the removal of lawyers from the compensation system.
They argued it left injured people at the mercy of insurers whose first duty was to shareholders rather than providing full redress for the injured.
But with the launch of the Care and Compensation document, ABI director general Stephen Haddrill contested that the ABI's proposals promised a fast, fair and cost effective system that put the interest of the legitimate claimant first. The ABI backed up its argument with a list of statistics: the average employers' liability personal injury claim takes 1,000 days to settle and for every £1 insurers pay out in compensation, they pay an extra 40p in legal costs.
So the ABI aimed to cut the time taken to settle an average personal injury claim to just six months, through a fast-track procedure.
This would enable anyone making a claim for under £25,000 (90% of all personal injury claims) to seek compensation without having to go through a long and costly legal process.
Gone would be the need for the claimant to consult lawyers who, says the ABI, "typically" conduct lengthy and expensive investigations before they put the claim forward for payment.
But Frank Maher from Legal Risk has a solution to this log jam between Apil and the ABI. Let us call it a third way. He says keep lawyers in the loop but only for a set time.
This can be up to six months for claims of less than £2,500 and no more than a year for larger claims.
This would keep lawyers in the claims process but force them to act fast, and as a result keep legal costs down.
And Maher accepts that the ABI's initiative to keep legal costs down (the ABI cites £2bn is spent each year on claimants' legal costs) is sound.
But so is Apil's suggestion that lawyers should be not taken out of the process.
If a resolution cannot be agreed upon within the suggested timeframes, Maher suggests, these cases should then go before a mediation committee.
This sounds like a workable alternative to the stand off between the ABI and Apil.
And as the ABI's Nick Starling said in December last year, he was open to alternatives to the ABI's proposals.
MP John Greenway also noted that divisions over reforming the compensation system would in the end scupper the ABI's plans of getting them on the government's agenda.
The ABI should start by compromising over the use of lawyers in the system and embrace this "third way" view. IT
