Nearly half said the costs of doing business had increased in the face of government reforms in the Civil Liabilities bill

42% of personal injury lawyers reported their profits had fallen over the past year, according to a survey by First4Lawyers.

The findings come as the government prepares to push through its Civil Liabilities Bill aimed at restricting payouts for minor personal injuries.

The fall in profits occurred even though most firms surveyed said turnover had either stayed the same or increased. Nearly half said the costs of doing business had increased, with a third having increased their investment in marketing.

Advertising spend, and costs are spiralling upwards both online and on TV as firms look to grab greater shares of the market.

As well as this, 47% saw no likelihood of the government watering down the reforms in the Civil Liability Bill. 

Asked how they envisaged the PI market looking if the bill became law, most thought that insurers will continue pushing for yet further reform, while 67% predicted that new claims management companies would step in to act for litigants in person, leading to a new mis-selling style scandal.

However, 47% thought the profession would find a way to handle small claims.

First4Lawyers managing director, Qamar Anwar said: “Whatever the outcome of the government reforms, there will still be injured people looking for legal assistance. The question is where they will go and our analysis of the market shows that firms realise that they have to raise their game and their profile.”

TV advertising is also surging: there were over 135,000 personal injury and medical negligence adverts on TV in the third quarter of 2017, which is more than 1,500 per day. The volume of adverts was up 39% compared to the same quarter of 2016, and 18% compared to the second quarter of 2017.

Anwar added: “It is not an easy time but the smart firms, with clear strategies and effective marketing, will ensure that those injured people have access to proper advice, rather than leaving them to the clutches of unqualified chancers.”