Solicitors costs
"Why has my motor premium increased?" The answer to this question over the years has been either "repairers' costs are too high" or "personal injury awards are going through t …

Solicitors costs
"Why has my motor premium increased?" The answer to this question over the years has been either "repairers' costs are too high" or "personal injury awards are going through the roof".

Since April 2000 the main reason for the increase is simple - claimants' solicitors' costs.

I will give you an example - our insured rear-ended a car containing a driver and three passengers all in their late teens. The impact was not severe - we admitted liability within days. Four claimants all went to the same solicitor; all four were unemployed and all allegedly sustained whiplash injuries.

Despite the fact that none of the claimants visited a doctor or hospital, their solicitor managed to "find" a doctor who stated that the prognosis for recovery would take between 12 and 18 months. The medical reports were two to three pages long and the doctor charged £345 for each of the claimants. The claims were settled for total of £7,500 and the costs were settled for £21,440.26.

Solicitors rarely calculate their own costs; they pass the file over to costs consultants. They rarely interview their clients; they pass the papers out to firms that carry out initial inquiries, explain CFAs to clients and charge £450 a time. So we have two cottage industries springing up.

When I first joined the insurance industry, the costs were agreed on a rule of thumb basis. While I am not suggesting we go back, I think that unless claimants' solicitors become more reasonable, the insurance industry will continue to fight the costs claims in the courts.

Name and address withheld