PI clients paying 'unfair' charges

Claimant personal injury lawyers should charge their clients more modest success fees and encourage them not to buy after-the-event insurance (AEI) until proceedings are served, the Forum of Insurance Lawyers (FOIL) declared this week.

FOIL said that AEI is intended to protect clients from the risk of paying the opponent's fees if they lose the case.

There is no risk before proceedings are issued, and a premium is therefore an unjustifiable expense which benefits no-one except the insurer or claims farmer, the statement continued.

FOIL went on to condemn what it described as a hike in success fees by claimant lawyers.

It said the average success fee charged before 1 April this year was 45%.

Now, however, it said fees of 90% and 100% are 'a matter of course', and 'represent additional costs out of all proportion to the true costs of replacing legal aid'.

The group has encouraged claimant solicitors, for the sake of continued co-operation with FOIL, to 'seek modest success fees'.

Anthony Marshall, treasurer of the Association of Personal Injury Lawyers, replied: 'If only those cases which proceed were covered, premiums would be astronomically high.

'The whole point is that there is a reasonable spread of risk over cases, and as this is how the insurance industry expects solicitors to act, it is a bit rich that another part of that industry is now saying it is unfair.'

Mr Marshall said he had more sympathy with FOIL over success fees.

He said: 'Solicitors should properly assess risk...

success fees should be reasonable and justifiable'.

Meanwhile John Gorner, a litigation partner with Manchester-based Neil Myerson, has set up a new claims management for personal injury cases called Recover, which aims to emphasise rehabilitation and not just compensation.

Recover is to launch a national advertising campaign featuring television celebrity Anne Diamond, who said: 'We will ensure that we set a professional and honest precedent in the industry.'

l Insurance premiums in conditional fee cases which settle before proceedings are issued are recoverable, not as stated in [2000] Gazette, 9 November, 3.

However, insurance companies are challenging this.

Jeremy Fleming