Insurers' efforts to clamp down on legal costs have received a boost following a court decision on medical experts' fees.
In Earle v Centrica the judge effectively ruled that claimant solicitors must not profit from services provided for them by third party service providers.
The ruling will end the widespread practice where solicitors outsource services and attempt to recover costs at a higher rate as if they had undertaken the services themselves.
Martin Cox of DLA Piper Rudnick Gray Cary, which represented the defendant Centrica, said the ruling could save the insurance industry thousands of pounds. "Given the volume of road traffic claims the impact will be huge," he said.
In the case the claimant's solicitor billed the defendant's insurer £435 for an expert's report and £25 plus VAT for administration costs.
But the judge ruled that the claimant was only entitled to recover the record production fee of £50 and the medical expert's fee of £285 - the amount the solicitor had actually paid for the services from a third party.
Cox said: "There was an obvious risk that solicitors would seek to circumvent the restrictions on their profit costs by delegating matters which would normally be viewed as solicitors' work to third parties.
"Any doubt as to reasonableness had to be resolved in favour of the paying party."