The irresponsible actions of a minority of law firms, after-the-event insurers and claims handling companies is threatening to derail Lord Woolf's legal reforms, the Forum of Insurance Lawyers (Foil) claims.
The body for insurance lawyers said that while a majority of lawyers and insurers were committed to Woolf, some parties were pushing for unreasonable success fees in some of the 90% of claims which are settled prior to proceedings.
Foil said: "It is our view that paying an after-the-event premium in these cases where there is no risk, is unreasonable and benefits nobody except the ATE insurer or claims handler."
It added: "It is far preferable and more cost-effective to pay properly underwritten ATE premiums in the 10% of claims which go to proceedings and where a risk to the claimant actually exists."
Foil said Woolf's reforms were intended to cut the cost of litigation and speed up claims settlement.