Accidents: insurer blames lawyers for delaying pay-outs and causing high premiums

The rising cost of personal injury claims is set to outstrip the growth in the actual number of cases, according to research last week.


Analysts Datamonitor said there was an overall 2% fall in personal injury (PI) claims last year, mainly due to a drop in employers' liability cases following the closure of the British Coal compensation scheme.


The report found the number of motor claims has changed little since 2001. '[This shows] it is the cost of claims rather than the volume that is the challenge for insurers,' it said.


Looking to the next five years, it forecasted 'marginal growth in the number of accident claims and steady growth in the cost of personal injury claims, driven largely by increases in employers' liability claims costs'.


Datamonitor also predicted that the number of claims farmers will drop from around 400 to 100-150 once regulation is introduced. But there will be more competition from other companies such as the AA when the government's legal services reforms come into effect.


The report said that Injury Lawyers 4U, the law firm marketing network set up by Manchester practice Amelans, overtook the National Accident Helpline as the largest PI advertiser in 2005, spending £5.5 million. It also generated the highest number of monthly claims.


Meanwhile, insurer Royal & SunAlliance has launched a scheme to speed up claims. Blaming claims farmers and lawyers for delaying pay-outs, causing higher premiums and having little emphasis on rehabilitation, it is piloting a three-step system of early notification, rehabilitation, and compensation.


A statement from the company said that if claimants wanted a solicitor to advise on the compensation, 'we will work together with the injured party to facilitate this'.


But it went on: 'By removing the need for a claimant lawyer automatically to become involved in the claim, the costs will fall and help control the current increasing premiums.'


A spokeswoman for the Association of Personal Injury Lawyers said: 'We see the need for an early, independent assessment, but believe the rehabilitation provider should be free from external influences so that the client receives the best treatment possible.'


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