Personal injury firms looking for new revenue from industrial deafness claims have been warned the cases come with significantly more risk than routine PI work.
The Association of British Insurers (ABI) yesterday accused firms of ‘cashing in’ on claims for industrial deafness to make up for losses suffered through reduced fixed fees in other areas of work.
The ABI said firms are attracted by substantially higher legal fees, stating the average fee for a claimant lawyer settling an industrial deafness claim last year was £10,500 – compared with £500 for whiplash claims going through the fixed-fee portal.
Lesley Graves, managing director for personal injury consulting firm Citadel Law, said any firm seeing industrial deafness claims as easy money was ‘sorely mistaken’.
Graves said her firm’s industrial disease specialists have seen a tenfold increase in demand to review cases, with a quarter of new enquiries relating to industrial deafness.
‘Our review has highlighted serious incidents of poor case preparation and under-settlement or failure, leading to the risk of the firms themselves facing professional negligence claims,’ she said. ‘You can’t pile ‘em high and sell ‘em cheap in this area of law.’
Graves suggested that the insurance industry should do more to increase its members’ skills for dealing with industrial deafness claims, to reduce the time cases take to process.
The ABI has said that the average compensation award for an industrial deafness claim is £3,100, meaning that for every £1 an insurer pays out in compensation to the claimant, they pay out just over £3 in fees to the claimant’s lawyer.
Speaking at the European Forum on Claims Management yesterday, ABI head of motor and liability James Dalton said insurers are prepared to pay ‘fair compensation’ to genuine claimants, but he called for lawyers’ fees to be ‘more proportionate’.
He added: ‘Industrial deafness claims are fast becoming the new cash cow for claimant lawyers, eager to make up for last year’s reduction of fixed legal fees in the claims portal.’