The government's proposals for claims reform have sparked controversy

Despite many months of meetings and working groups with the insurance and legal communities, the Ministry of Justice’s proposals for reform of the personal injury claims system is proving controversial.

While all parties appear to accept that system needs to be streamlines, there is, not surprisingly, division over how this should be achieved.

Insurers are concerned about the tight timescales in which they must make a decision on whether to admit liability. There are fears that the timetable will be impossible to meet and could lead to fraudulent and other unmeritorious claims slipping through the net.

The ABI has also expressed disappointment that the small claims limit has not been raised to £5,000.

Legal expenses insurers on the other hand have warned that the proposals could have a devastating effect on the after-the-event insurance market.

Meanwhile, the claimant lawyers' trade body, the Association of Personal Injury Lawyers (Apil), has rejected a key part of the proposals, saying it would be detrimental to claimants. In its response to the MoJ this week, Apil said raising the fast-track limit to £25,000 would “swing the pendulum towards cost cutting instead of fully protecting claimants’ rights".

The government’s proposals, it said, were only suitable for straightforward road traffic accident cases.

Claimant law firm Thompsons Solicitors also waded in with a survey which found “overwhelming opposition” from the members of the public to the reforms. The survey sought views on proposals to fix solicitors’ costs.

Helpfully for Thompsons, the public were concerned that limiting their lawyers’ budget could be detrimental to their case, stating there was a risk that “corners would be cut” to keep the costs down.

The MoJ is expected to announce the Claims Process Reform Bill in the autumn. It is not yet clear whether this timetable will slip under Gordon Brown’s government.