LIABILITY INSURANCE: employees should have lawyer to check that settlement is fair

Claimant personal injury solicitors should only have a role in checking settlements of lower-value work-place accident cases and then work under fixed fees in other cases to save costs, the government has suggested.

Unveiling its final report in its review of employers' liability compulsory insurance, the Department for Work and Pensions said too many businesses were still suffering from rising insurance costs and recommended that these could be cut by streamlining the claims process.

It said one option could be for any proposed settlement in lower-value claims to include provision for employees to seek legal advice to check that it is fair, but otherwise for the insurer or employer to deal directly with the claimant.

'Where the claim is more complex, then a greater deal of legal input is likely to be necessary,' the report said.

It suggests that further savings could be made by extending the fixed fee scheme that is currently operating for road traffic accident (RTA) cases that are worth 10,000 or less, if it proves successful.

The report also recommends greater use of alternative dispute resolution (ADR) and a new framework promoting rehabilitation, plus separating long-term occupational disease risks from accident risks.

David Marshall, president of the Association of Personal Injury Lawyers, said removing lawyers from the process would lead to an uneven playing field, and argued that even lower-value claims could be too complicated for fixed fees.

'To begin discussions about introducing such a scheme to a much more complex area of the law before the new [RTA] scheme is reviewed in two years' time is dangerously premature,' he warned.

Forum of Insurance Lawyers president Claire McKinney praised the focus on rehabilitation and ADR, which could help preserve employers' relationship with injured staff.

'FOIL sees predictable costs in employers' liability cases as a logical progression,' she added.

'Most FOIL members will have been working to a fixed fee in fast-track employers' liability cases for some time.'

Law Society chief executive Janet Paraskeva said that while the Society recognised the desirability of greater predictability of costs, decisions on whether to extend fixed fees should wait until 'we have experience of how the scheme is operating for road traffic cases'.

Paula Rohan