The government’s adviser on RTA claims has warned that ministers’ failure to heed his advice could lead to bad behaviour being incentivised.
Professor Paul Fenn said today that the government had not acted on three key recommendations from last year’s review of the RTA Portal.
A request for a further review had been ‘completely ignored’, Fenn told the Westminster Policy Legal Forum, while the government had not ensured that fixed costs will be proportionate to damages.
In addition, Fenn (pictured) said there was little to suggest that solicitors will be incentivised to keep cases within the portal and not allow them to drop out.
The Ministry of Justice will push ahead with plans to extend the online portal for employer and public liability claims from July, having already cut fixed costs for low-value RTA claims by £700.
‘This is likely to lead to earlier and lower settlements of undisputed claims,’ said Fenn.
Fenn said it was wrong to compare the UK system with that in Germany, arguing that the German system is better at encouraging lawyers to act in clients’ best interests. In this country, however, with a fixed-fee system not attached to a sliding scale for damages, claimant lawyers had little option but to accept the initial offer on behalf of their clients.
Fenn added that the ‘uncoordinated’ existing structure will also mean fewer defendant firms opt to dispute liability.
‘The system mean bad behaviour is incentivised more often and good behaviour is rewarded less often,’ he said.
James Dalton, head of motor claims for the Association of British Insurers, denied that claimants would lose out if lawyers are taken out of the equation.
‘I hear the argument that claimants will be left to the mercy of big nasty insurers, but there is a framework in place designed to protect claimants,’ he said.
‘It is in the insurers’ code. Insurers have an obligation to the financial conduct authority to treat customers fairly – the claimant lawyers might not like the fact but third-party assistance allows genuine claimants to get compensation more quickly.’