PI lawyers support employers' liability insurance reform

Personal injury solicitors on both sides of the fence have welcomed government plans to reform the employers' liability insurance system, although they clashed on a possible fixed fees scheme for legal costs.

Claimant and defendant practitioners spoke out after the Department for Work and Pensions (DWP) and the Office of Fair Trading simultaneously published reports on how rapidly rising premiums could be curtailed while still ensuring the safety of workers.

Both reports highlighted growing concerns that premiums had escalated by some 50% since 1997, with legal costs now making up 40% of the claims spend owing to above-inflation increases in lawyers' and experts' fees.

They said that although the number of claims brought had stabilised, damages awarded were on the rise.

They pointed to particular problems with 'long tail' claims that arise from occupational diseases such as asbestosis or vibration white finger; the DWP suggested that these could be separated from other accident risks for insurance purposes.

It also mooted the idea of introducing a fixed costs scheme along the lines of the one being developed for low-value road traffic accident cases.

Greater use of alternative dispute resolution and rehabilitation should also be on the agenda, it said.

However, DWP minister Nick Brown said the government's overriding aim is to develop the basis for more risk-related premiums.

An Association of Personal Injury Lawyers spokeswoman said it would be inappropriate to extend fixed fees to this field.

However, she supported plans to provide an incentive for companies to carry out better risk assessment, as it was only fair that businesses which tried to avoid risks paid lower premiums.

Jason Rowley, president of the Forum of Insurance Lawyers, backed the possibility of a predictable costs regime and a review of legal costs.

'We are fully behind the DWP's aims of increasing the link between the level of premium and the insured's record in respect of health and safety,' he added.

Paula Rohan