Personal injury lawyers were incandescent this week over proposals by the UK’s largest insurer to create a ‘solicitor-free zone’ for personal injury claims worth less than £5,000 – and to scrap damages altogether for claims worth less than £1,000.

A report by Norwich Union blamed solicitors and claims handlers for ‘exploiting the public’s expectations’ and fuelling an increase in ‘frivolous and vexatious’ claims.


Underwood: fixed costs

The report says solicitors’ involvement hinders the claims process, with insurers forced to pay solicitors’ rates for what is often no more than claims handling rather than legal expertise.

It suggests that claims below a £5,000 threshold should be settled without a lawyer and that an apology or ‘bunch of flowers’ should be acceptable for claims below £1,000 – with people not ‘expecting’ to be compensated for the bumps and knocks of everyday life.


A Norwich Union spokesman said: ‘It is a generally accepted figure that for every £100 given in compensation, we pay £40 to solicitors. Do they really add any value if liability and quantum are not disputed? We are used to dealing with third parties directly. But as soon as there is an injury involved, we have to involve a lawyer. We know we can handle claims at a fraction of the cost.’


Leading personal injury solicitor Kerry Underwood, senior partner at Hertfordshire firm Underwoods, said: ‘This is stupid and illogical – why should people who have suffered injury be treated differently to someone who has suffered a contractual loss? In an advanced Western society, to say that someone should accept flowers as compensation is a patronising attitude.’


He added: ‘Where powerful insurance companies are defending is precisely the area where claimants would be hopelessly lost without solicitors. Any problem with lawyers’ costs can be dealt with by a fixed- costs regime.’


Colin Ettinger, president of the Association of Personal Injury Lawyers, said: ‘Norwich Union’s so-called claimant-centred approach is a smokescreen for cutting their own costs by seriously limiting consumers’ access to legal advice and assistance.’


A Law Society spokeswoman said the proposals were ‘a charter for the irresponsible’. She added: ‘All the evidence shows that there is no compensation culture in the UK and that the number of claims is not rising.’