Insurance lawyers call for lower fixed-fee rates
Insurance lawyers are pressing the Ministry of Justice to reduce the fixed-fee rates payable to claimant lawyers under the Road Traffic Accident portal.
Responding to a government consultation on speeding up county court cases, which closed last week, the Forum of Insurance Lawyers said the current level of fees was ‘too high’, and was fuelling the payment of referral fees.
However, Law Society chief executive Desmond Hudson indicated that he is seeking a rise in the rates in line with inflation.
FOIL also blamed claimant lawyers for causing delays in the portal process, and called for time limits to be introduced for claimants between stages 1 and 2.
It added that insurers should not have to pay stage 1 costs until after completion of the second stage, to avoid payments being made on cases that are not progressed beyond stage 1.
FOIL also supported a rise in the value of claims dealt with by the RTA portal, from £10,000 to £25,000.
It said: ‘The method to be used for calculating fixed recoverable costs and the levels set will need further assessment [before the limit for RTA portal claims is raised].
'Some of our members have expressed concern at a system which links costs to the value of the claim on the basis that this can lead to unnecessary distortion.
‘We would wish to see the introduction of a costs matrix which avoids creating incentives for adverse behaviour, and which sets costs at a level which does not build in automatic payment of referral fees.’
FOIL president Tim Oliver added: ‘FOIL has proposed that fixed fees and hourly rates in the personal injury system be reduced, which in turn would lead to a reduction in the price of referral fees.
'This would be a market mechanism by which referral fees could be curbed while the government considers the practicalities of introducing a ban.’
But Hudson said: ‘The fixed costs were negotiated and agreed by all of the stakeholders that were involved in the original negotiations, which included insurers and FOIL representatives.
‘The MoJ agreed to review the process after one year. We expect that review shortly. We have seen no empirical evidence to suggest that the rates are or have been set too high. If anything, the rates should be sensibly reviewed in line with the rate of inflation.’
Comments
Do they never give up? Even
Do they never give up? Even when they get exactly what they want they still push for more.
They've been caught out on referral fees - saying the rise in premiums is due to rise in claims, while creating this rise with referral fees. An attempt to 'control' this self-inflicted rise in claims was at the root of Jackson and the current bill. Quite why the govt is pressing ahead with the proposed changes - which only benefit insurance companies - when it is so obvious that the insurers are to blame in the first place is staggering. Yet FOIL have the gaul to attempt a postive spin on this, suggesting it will lower costs all round.
There will be no windfall for solicitors if referral fees are banned - the sums that now go to CMCs for marketing purposes will instead go to marketing companies for marketing purposes. Sad to say that the govt will at best do a half-arsed reveiw and no doubt what the insurers want the insurers will get.
Breathtaking
Wow - levels of fantasy not seen since the last Lord of the Rings film.
Perhaps someone ought to remind FOIL that the system does not exist to serve the costs demands of multi-billion pound insurance companies, but to compensate people injured because of their careless customers...
I don't do much RTA work, mostly doing EL and disease claims. However, I do have a steady trickle of RTA work, and I can say that not one of my claims started through the Portal finished in it. Every single one has dropped out due to the default of the Defendants somewhere along the line. Liability decisions not given, offers not made, costs not paid.
If there is any delay caused by Claimants between stages 1 and 2, it is likely because we are actually doing our jobs properly. Except where people have recovered by the date of examination, most medical reports give a period of prognosis into the future. Now the injured person might recover as expected, or they might not. I have dealt with plenty of cases involving all sorts of injuries where the initially anticipated recovery period has been inadequate. By rushing into a settlement before we are ready, we risk getting it wrong for the person who actually matters - the injured person.
Finally, I would say that my EL and disease caseload is one where delay by insurers is the absolute norm. They drag cases out for months on end, but in dispute, just in not doing anything at all. Most disease departments have time delays of at least 3 months to respond to any letters at all. A lot of my letters are ignored, and telephone calls are not returned. I am in Court 2 or 3 times a month obtaining orders for disclosure of documents because insurers have just ignored us for months on end. Just before writing this, I have made a further, 5th, chase up to an insurer in a disease case where my opponent is trying to liase between 2 other insurers, and has gotten nowhere since March. This is not a case where there is a dispute - it is just not being addressed at all and this is when the delays and my chase-ups will all cost them money. Imagine what it will be like when there is no incentive at all for insurers to deal with claims.
As for referral fees - we've been saying for years that insurers have had their fat fingers in the till taking big fees from their "panel" firms, but no-one paid any attention. Now they are trying to distort it to hide the fact they actually benefit from them i.e. they are the ones receiving the money.
Hypocrisy doesn't even come into it.
Tell you what let's work for
Tell you what let's work for free would that make you happy?
Maybe everything gets fixed then no need for Defendant firms of Solicitors and no jobs for them, please keep talking all the way to the job centre! 3 minutes ago