Insurers could face a £4bn bill following today's Supreme Court ruling on After The Event (ATE) premiums, according to The Accident Group (TAG).
In his ruling on a test case brought by TAG, Master Peter Hurst emphasised that the legality of 'no win, no fee' agreements has been upheld.
TAG claims the ruling ensures the rights of consumers to affordable access to justice.
TAG said today's ruling by Master Peter Hurst means that more than 200,000 personal injury victims will be able to recover the legal costs of their cases.
It claimed that many insurance companies, including Norwich Union, AXA and CIS, had previously refused to reimburse legal expenses to thousands of personal injury claimants based on alleged flaws in 'no win, no fee' agreements.
TAG head of corporate affairs Clive Entwistle said: "As the leading personal injury compensation specialist, we have always championed the cause of the consumer to ensure people have affordable access to justice in the UK.
Today's ruling is a further justification of The Accident Group's campaign to provide the public with a true replacement for legal aid in personal injury cases. Up until today's landmark decision thousands of claimants have suffered because the insurance industry put up groundless technical challenges denying them their rights under the Access to Justice Act."
