Solicitors handling the hundreds of thousands of straightforward road traffic accident (RTA) claims brought every year look set for a significant cut in the fees they receive, the Gazette can reveal.

Talks to agree a new fixed-fee claims process for RTA claims worth less than £10,000 where liability is admitted concluded last week with an ‘in principle’ industry agreement.

Negotiations on the claims process have been dragging on since last year, but a three-day mediation run by the Civil Justice Council – called in by the Ministry of Justice to try and break the deadlock – proved successful as the deadline set for agreement approached. The full details are under strict embargo pending approval by lord chancellor Jack Straw.

What is known is that the government has stayed firm on its policy to allow claimants to take out after-the-event insurance at the start of the case, despite protestations by liability insurers that there is no risk to insure until liability is denied.

However, the Gazette understands that the existing predictable costs scheme for RTA claims worth less than £10,000 looks set to remain in place for cases that fall out of the new process, meaning fees for claims that stay in it are likely to be significantly less than the level of predictable costs.

This will alarm claimant solicitors, who have long complained that the costs allowed under the existing regime – which were drawn from 2002 research on fee levels – have never been reviewed, or even increased in line with inflation.

Anthony Hughes, president of the Forum of Insurance Lawyers (FOIL), said he was pleased agreement had been reached, saying a ‘very commercial approach’ was taken.

The mediation team comprised former Law Society president Michael Napier, former FOIL president Tim Wallis, now of Expedite Resolution, and Civil Justice Council chief executive Robert Musgrove. The new process is slated to begin in April 2010.