PI lawyers hit back at insurers' claims of rocketing costs

The Lawyer.com, 31 March 2008

The Association of Personal Injury Lawyers (Apil) has hit out at fresh claims of spiralling costs in the legal arena.

It comes amid claims from the Association of British Insurers (ABI) that, for every £1 paid in compensation to claimants, an additional 43p is paid in legal costs, or 43 per cent. The percentage rockets in cases worth less than £5,000, with lawyers receiving 88p for every £1 paid in compensation on road traffic accidents.

The report, 'Adding Insult to Injury: the Need for Reform of the Personal Injury Compensation System', also accuses claimant lawyers of taking too long to notify defendant insurers of claims, hence driving up costs.

Apil chief executive Denis Kitchener rejected the claims. "Legal costs have remained flat at 30 per cent for the last five years," she said. "Throwing the blame for rising costs on claimant lawyers isn't helping anyone. We need to look at the entire system."

The Ministry of Justice is expected to announce new rules governing the personal injury sector imminently. The rules are expected to curtail the time lawyers get to notify insurers of claims and slash how long it takes insurers to investigate liability.

ENDS