With regards to the comments from the Accident Relief Campaign, supported by Kerry Underwood (see [2006] Gazette, 4 May, 1), it is extremely misleading to criticise the role of legal expenses insurance on the basis, as stated by Mr Underwood, that 'with any RTA [road traffic accident], any lawyer in the country will do it on a "no win, no fee" basis'.

This seems highly unlikely, keeping in mind the fact that 80% of RTA no-fault claims fall below the relevant small-claims limit and do not attract profit costs. Without such cover, therefore, innocent motorists would be left to fend for themselves in the vast majority of RTA cases.


In addition, Mr Underwood has not given credit to insurers for the wide cover offered for minimal premiums, which usually includes cover for foreign claims, other sides' costs in lost cases, and other expenses, such as replacement car hire.


I suspect that the whinge about legal expenses cover has more to do with the use of panels and the payment of referral fees, but both of these can be easily justified by insurers which will point to the higher success rates and faster recovery times achieved by panel firms in typical cases.


Referral fees are, of course, merely a fact of economics, representing the acquisition cost of business to the solicitor, and reflecting the high level of profits achieved on RTA and other personal injury cases in the current environment.


The impression that referral fee income represents some kind of windfall profit for insurers demonstrates a lack of knowledge of the market, where insurers have to rely on commission and referral payments to cover expenses, in the absence of traditional premium income.


In calling for Financial Services Authority involvement, the Accident Relief Campaign would do well to keep in mind that, unlike solicitors, legal expenses insurers are already regulated by the authority.


Paul Asplin, chief executive, DAS Group, Bristol