Starling trenchantly defended the ABI position on the compensation process.

He said: "We are proposing fundamental reform to the personal injury compensation system, not just to reduce legal fees but to produce a fairer, faster and better system for the genuine claimant."

He welcomed the support of "an increasing number of bodies backing us, such as Citizens Advice, employers' organisations and local authorities".

Starling was blunt in his assessment of the current system's problems: "The personal injury compensation system is failing. It is slow. It is expensive. It undervalues care and rehabilitation. It does not deter fraudulent claims. In fact, it probably encourages them in some senses. It fails far too many genuine claimants."

The ABI's solution? "A new system for resolving claims before they reach the courts", incorporating:

  • Fixed timetables
  • Independent arbitration
  • Free legal advice above the small claims limits
  • A new public tariff of damages for personal injury
  • Higher financial limits that determine how claims are handled through the courts
  • Extended use of fixed-fee regimes
  • New financial penalties to deter exaggerated claims, or indeed unreasonable behaviour by insurers.
  • While Starling was keen to reassure law firms that "we do not propose cutting out lawyers", he emphasised the need for "an apology to be offered to the claimant, liability accepted and an offer of compensation made before costs are incurred".

    An increase in the small claims limit would also be beneficial as the current limit of £1,000 has not changed since 1991.