Industry calls on chancellor to cut EL legal costs

The CBI and the ABI have called on the chancellor to help cut legal costs in employers' liability (EL) insurance.

A joint letter from the CBI and ABI called for action on the EL crisis where spiralling premiums have caused problems for thousands of companies.

The joint letter said: "Legal and associated expenses make up 40% of the total cost of employers' liability insurance claims.

"These high frictional costs are one of the most unattractive features of the current employers' liability system."

The letter to Gordon Brown claimed that the high legal costs were in spite of the fact that the majority of claims were paid by insurers without the case proceeding to court.

The Department for Work and Pensions is currently working on a review of employers' liability insurance. But the ABI and the CBI claimed that "immediate government action" was justified because so much attention had focused on the "extremely high" legal costs.