A leading defendant firm has said it expects personal injury claims to return to pre-Jackson levels.

Keoghs' director of counter-fraud strategy, James Heath, said not enough had been done to dissuade the ‘have a go’ approach, particularly when insurers are under pressure to process claims quickly.

Writing in the firm’s annual fraud index, Heath said the Jackson reforms, which came into force last April, have affected claims figures. In the year to date, the average number of portal claims notifications firms created is 5% less than for the same period in 2011/12.

‘There has certainly been evidence since introduction of the reforms that the claimant supply chain has been disrupted,’ said Heath. 

‘However, in our opinion it is highly unlikely that such disruption will be permanent. Some clients are already reporting that claims frequency is approaching pre-reform levels, and many insurers are predicting that it will stabilise at between 95% and 100%.’

The Jackson reforms abolished the recoverability of success fees and ATE insurance from the losing defendant. They also banned the payment of referral fees for personal injury claims.

But Heath said the introduction of qualified one-way costs shifting (QOCS) had encouraged claimants to make suspect claims as defendants now have to ask the court to find ‘fundamental dishonesty’ to recover its costs.

‘Because of QOCS, there are few circumstances where claimants will be ordered to pay the defendant’s costs should their claims fail. Without robust clarification on what constitutes ‘fundamental dishonesty’ – which seems to be unlikely in the short term – there is little to dissuade a “have a go” approach.’

The Keoghs fraud index, based on information from insurers, found that Birmingham remains the UK’s number one hotspot for motor fraud, accounting for 7.4% of all suspect claims.

This was followed by East London (4.6% of all suspect motor insurance claims), Bradford (4.2%) and Manchester (4.1%), placed second, third and fourth respectively.

For the first time since Keoghs started producing its fraud index in 2009, Liverpool dropped out of the top five and has fallen to number 14. The biggest increases were in Slough, Blackburn, Ilford and Twickenham.