Insurance industry research dismissing the value of personal injury lawyers gives a wrong view of the claims process, writes Richard Langton


The Association of British Insurers' (ABI) campaign to promote their care and compensation proposals recently challenged the 'added value' of personal injury lawyers and proposed abolishing legal costs for claims of less than £5,000. The research purports to prove that an average unrepresented victim receives more compensation, more quickly. Workers get a surprising £666 less with a solicitor than without.



I have never failed to beat an insurer's offer at trial. In 23 years, I have once accepted an insurer's first offer. Most claimant lawyers say the same. Yet the ABI's 'research' implies insurers low-ball solicitors knowing they invariably under-settle, or over-compensate people without legal representation.



In fact, the statistics do not prove that a single claimant did worse with - or better without - a solicitor. Insurers may foster early relationships with more seriously injured claimants (especially in non-unionised workplaces) and discourage them from seeking legal advice. Early rehabilitation is now increasingly offered to these more seriously injured claimants, not least to reduce loss-of-earnings claims.



The ABI's data aggregates both injury and property damage. Disputed liability cases, with compromised settlements, will always have lawyers. Trade unions and claims management companies encourage access to redress in lower-value claims. The statistics miss the claimants who are denied by the insurer, and then give up. Claimants with less serious injuries have no understanding of how to pursue a claim without legal representation.



The association also reports on the user-friendliness of the small claims track of the county court. Pre-action protocols and the Civil Procedure Rules (CPR) are of course now available on-line for all. District judges may ensure fair play when faced with a lawyer on only one side of the court (difficult in an adversarial process) but, as now, cases will not go near a court, let alone a judge. Cases will settle pre-proceedings, for whatever the insurer is prepared to pay, because the vast majority of victims do not know the legal test of negligence, their statutory protections, or how damages are assessed. They are not equipped to litigate.



The ABI suggestion that, 15 years ago, 50% of personal injury claims were pursued in the small claims court is, in my experience, complete and utter nonsense. It has never been the place for personal injury claims. The last time the small claims limit rose for the personal injury element was in 1999, when it went up to £1,000. Previously, the same limit was for combined injury and financial loss. A retail price index increase (the court's damages inflation index) since 1999 would produce a limit of £1,175, not £5,000.



Disincentivising negligence, promoting rehabilitation and speeding up fair settlements is the mantra of the Association of Personal Injury Lawyers. Our own streamlining proposals recognise the complex issues involved. Our research shows the CPR protocol admission/denial timetable is missed by insurers in the majority of cases, causing costly delay. Funding rehabilitation should be a defendant's statutory obligation. Insurers need to be readily identifiable, interim payments should be made on admission of liability, and proportionate documentation should be provided for simple items of financial loss.



Numerous improvements can be made to the present process, but discussion, consensus and respect must guide the debate.



Richard Langton is president of the Association of Personal Injury Lawyers