RTA reforms could include higher value claims and extend to other areas, such as PL and EL

Insurers could save millions by curbing spiralling legal costs from personal injury claims under the Jackson Review, the results of which are due to be announced on Thursday (14 January).

The year-long review could recommend changes including:

  • Extending fixed costs for personal injury motor accidents from £10,000 to £25,000. (In October, the Ministry of Justice (MoJ) paved the way by fixing costs for claims between £1,000 and £10,000.)
  • A further extension of fixed costs into higher-value claims.
  • Extending the fixed-costs regime into public and employer’s liability.
  • Reforming or even scrapping recoverability of after-the-event (ATE) premiums.

First Assist managing director of legal expenses Peter Smith, one of the panel advisers Jackson used for the review, believes changes to personal injury are most likely.

Smith said: “The judiciary see the courts being clogged up, and the MoJ has already supported reforms for low-value road traffic accidents (RTA), so it would not be at all surprising if Jackson recommends an extension of that regime into higher-value RTA and other injury cases, such as employers’ liability and public liability.”

Smith said the reforms could save insurers’ money leaking from claims expenses, and that it would be interesting to see if a change was passed on to the customer with lower premiums.

Elsewhere, the report could change recoverability of ATE, which critics say places an unfair burden on the defendant.

Smith believes ATE premiums have helped encourage access to justice, however, and said he would be disappointed if it were changed.

Smith said: “I share the view that the polluter should pay, so if you cause loss to somebody, you should be responsible for the whole of it, and that would include the ATE premium.

“Undermining access to justice, which is a key requirement, would be inherently unfair and contrary to the objective of protecting access to justice, so I would be disappointed if there were a recommendation in the report.”

Other more unlikely, but possible, changes to the legal system include collective class action, cost-shifting and conditional fee arrangements, more commonly known as ‘no win no fee’.