The issue of road traffic accident claims has hit the news again this week with reports that there has been a fall of 11% in road traffic accident Claims but yet an 18% increase in personal injury claims arising from a road traffic accident.
It has been suggested that the reason for the decrease in road traffic accidents in the reduction in people using their vehicles as transport due to the high increase in petrol. However the reason for the increase of claims has resulted in blame on the Solicitors who deal with ‘no win no fee’ claims.
The suggestion that Solicitors are to blame has gone so far that Mr Ken Clarke, Justice Secretary, is proposing that success fees for solicitors are abolished. A success fee is a simple as its name – if a Solicitor is successful in the claim the Defendant has to pay a fee to the Solicitors for their success of the claim. This is designed to take the weight of losses from claims that do not win and have to be ceased on a No Win, No Fee basis for the client.
In addition to the abolishment of the success fee, the proposals include the prevention of details being passed from insurers to Solicitors. However, given recent news, this issue has clearly not been identified well enough. When you buy car insurance it is an optional extra to pay for Legal Expenses Insurance. The basis of Legal Expenses Insurance is that if you have an accident, your insurer will pass on your details to a Solicitor for a referral fee.
It must be emphasised that not all Solicitors, including us here at The Injury Lawyers, do not pay referral fees and only obtain their client’s details directly from the client. Legal Expenses Insurers is a massive profit making scheme for Insurer, of which the scale of the impact this has had on claiming has been sorely overlooked. The rise in premiums and cases has been linked directly to the fact that insurers are passing on unscrupulous claims so referral fee paying solicitors for profit. The insurers are not only cashing in on the whole thing, but they are actually to blame!
Furthermore, another item missing in the Actuarial Profession Report and other literatures is the main reasons of the rise in road traffic accidents. When an accident occurs on many occasions the Defendant’s insurer will make a pre-medical offer. A pre-medical offer is an offer to settle your case without obtaining medical evidence. It also means that the Defendant’s insurer are settling personal injury claims without even investigating whether an injury has occurred as a result of the accident in questions.
As it can been seen it seems that the insurers in the UK are the reason for their own misfortune and reason for road traffic accident claims costing insurers £400 million a year.
