Claimant personal injury solicitors face a cut of up to 53% in the fees they receive under a new road traffic accident claims process agreed last week.

However, the claimant groups which negotiated the deal with insurers said this will be balanced by a more streamlined RTA claims regime.

The new process will, from April, apply to hundreds of thousands of cases worth between £1,000 and £10,000 where liability is admitted.

Solicitors will be paid £400 for stage 1, whereby they complete a new notification form and send this to the insurer for a decision on liability. For stage 2, where liability is admitted and the process continues to a settlement within a strict timetable, solicitors will receive £800. At stage 3, where no settlement on quantum is reached and the case goes to court, solicitors will be paid £250 for a paper hearing or £500 for an oral hearing.

This means the most a firm can receive under the new regime is £1,700. Under the existing predictable costs scheme for such RTA claims – which continues for cases which fall out of the new process – the maximum is £2,550 for a £10,000 claim, meaning a 33% cut in fees. Where there is no dispute over quantum, they will receive £1,200, a 53% drop.

There are provisions for a second medical report in more complex cases and an extra £500 in cases involving children. Success fees will be 12.5% for stages 1 and 2, and up to 100% where cases reach stage 3.

John McQuater, president of the Association of Personal Injury Lawyers, said: ‘The fees are lower but there should be less work. Most importantly, solicitors should be able to deliver a quicker service to clients.’

Describing the figures as ‘fair’, John Spencer, chairman of the Motor Accident Solicitors Society, added: ‘We will continue to press the Ministry of Justice for sufficient and continued reviews of the process and figures.’

Anthony Hughes, president of the Forum of Insurance Lawyers, said it had been a ‘sensible negotiation’ and explained that the vast majority of claims fall at the lower end of the damages spectrum. The deal was mediated by the Civil Justice Council.