George Osborne provided a boost for the insurance industry in the budget when he announced that no win no fee services were to be restricted.
Last year, Lord Young had called for advertising restrictions to be put in place, as well as a revolution concerning the handling of personal injury claims.
Insurance giant Aviva welcomed the decision saying that 40% of every motor insurance policy is spent on compensation claims.
David Cameron has already expressed his concern that there is now a damaging personal injury compensation culture within the UK and unscrupulous personal injury solicitors have been only too willing to jump at the chance of taking on a claim on the slightest pretext.
In the future there could be changes to the law which would stop claim companies getting a fee from defendants. It is believed that it would deter both companies and claimants from pressing ahead with a case if they have to fund the legal process.
The public sector has suffered greatly from the compensation culture. The NHS has seen a marked increase in medical negligence claims and schools and councils have been hit with personal injury claims that they often settle out of court rather than risk an expensive legal battle.
Nick Starling from the ABI said he was delighted that the chancellor has promised to implement the full recommendations of Lord Young’s “Common Sense, Common Safety” report. Coupled with Lord Justice Jackson’s review of civil litigation, this will mean claimants get fair compensation in a timely manner whilst ensuring insurers can keep premiums affordable for their customers.