A top insurance industry lobbyist has claimed that claimant lawyers will have only themselves to blame for reduced profits having ‘killed the goose that laid the golden egg’.

James Dalton, head of motor and liability at the Association of British Insurers, accused the claimant community of ‘scaremongering’ following the government’s proposal to slash fixed fees for RTA claims.

It is the first public speech on the subject from the ABI since the Ministry of Justice began a consultation last week.

Costs will be cut from £1,200 to £500 for low-level stage-two cases going through the RTA Portal, with the new system set to be in place by next April.

Dalton, speaking today at the Motor Insurance Claims Conference, said lawyers were already making a profit of £300-£400 per claim even after the cost of any referral fee is removed. He added that claimant lawyer costs are already 20-35% higher than defendant legal fees.

‘What is clear from the government’s consultation is that they have clearly grasped the nettle in terms of stripping the fat out of the system,’ said Dalton.

‘I’m not expecting the public to be overly concerned that a few ambulance-chasers might make a bit less money, especially as they are the ones helping to fuel the rise in the cost of motor insurance premiums.’

Dalton said the ABI will focus on refining the evidence to respond to the government’s consultation deadline of 4 January.

He also called on personal injury firms to innovate and offer damages-based agreements for clients at a lower level than the 25% cap imposed by the Legal Aid, Sentencing and Punishment of Offenders Act.

‘If claimant lawyers start thinking about the business models of the future rather than trying to preserve the status quo of a market characterised by perverse incentives, inefficiency and excess, they might think about how consumers could get a better deal from their lawyer.’