The Association of British Insurers (ABI) will go through a dispute resolution process with personal injury claims companies over after the event (ATE) premiums.

Insurers who lose cases are baulking at paying what they see as unreasonably high ATE premiums.

The ABI said it would be involved in neutral discussions on the issue, before it considered litigation.

It hopes to set up the discussions as soon as possible and is in talks with several legal groups.

An ABI spokesman said: “Many insurers are saying they won't refund the ATE premiums because they believe they're far too high.

“We'll try to identify some points where there is agreement, or no agreement, and open it out to more people.”

The Forum of Insurance Lawyers (Foil) is supportive of the discussions, which are in line with the Woolf reforms' emphasis on resolving issues before court.

Foil president Andrew Parker said the discussion process was in the early stages.

“We're aware of it and are working closely with the ABI,” he said.