Fears that the Office of Fair Trading (OFT) would force a mass shake up of the liability markets have been shot down by the publication of its report on the sector.
The report, published today, was prompted by concerns about rapidly rising liability premiums.
The OFT today said price hikes in 2004 were ahead of general inflation but the massive premium rises seen in 2002 had not continued.
Cost pressures were likely to “fluctuate around a rising trend”, the report said.
Improved communications coupled with the fact that “significantly” fewer businesses had been refused cover, it said, meant it would not undertake a further review in the short term.
A shake up of the ATE market is has also been ruled out.
The report failed to establish a link between the cost of ATE premiums and liability premiums. It also neglected to say whether the limited availability of ATE has constrained solicitors from taking difficult cases forward.
It added that the Civil Justice Council (CJC) would work with the Department for Constitutional Affairs (DCA) to pinpoint the major issues facing the ATE market later this year.
