£2.7 million per day; that’s the price of legal costs, according to the Association of British Insurers who are now calling for reform to the civil litigation system in the UK.
Millions of consumers could be losing out because of the high costs involved in personal injury claims. The ABI has now responded to the consultation on civil costs run by the Ministry of Justice.
In particular the response highlights that 10% of all motor insurance premiums go towards paying the legal profession adding an additional £41 a year to the cost of a policy. And for each £1 that is paid out in personal injury compensation, a further 87p is spent on legal costs.
The director of general insurance and health at the ABI, Nick Starling, pointed out that the high legal costs are central to the compensation system that is not only too slow and complex, it also fails genuine claimants.
Claims management companies have led people to believe that the compensation is there to exploit. These businesses fall over themselves to tell us that personal injury solicitors can win us a fortune and unsurprisingly some unscrupulous people take advantage.
The current system fails everybody, he continued. The country now has a real opportunity to implement much needed change in order to deliver a fairer, faster more economical compensation system to those who need it. The Association fully supports Lord Justice Jackson’s recommendations as being in the best interests of all concerned.