Motor insurers spend too much on personal injury claims

Lloyds Market Association has thrown its weight behind government proposals to reduce the cost of civil litigation by ending the recovery of conditional fee arrangements, after-the-event premiums and success fees.

The LMA also wants to see the Ministry of Justice thoroughly implement the recommendations of Lord Jackson including banning referral fees.

The largest expenditure for UK motor insurers is now the payment of personal injury compensation for accident claims. This has led to motorists paying increased insurance premiums. Middlemen are exploiting the inefficient personal injury claims system leading to an expensive, imbalanced and unfair system for defendants.

In the LMA’s opinion, Lord Jackson’s recommendations strike a careful balance between the interests of claimant and defendant. However, it warns that these must be implemented in full and the government should resist the urge to abandon the proposals to extend the use of fixed costs.

The LMA has also warned the government that it will face significant pressure from personal injury solicitors and other intermediary bodies who have a vested interest in keeping the current system. A Lloyd’s spokesman said the Association urges the coalition to disregard the narrow vested interests of this group and concentrate on the wider public interest.

It does seem highly unfair that innocent motorists have to pay the price for the unscrupulous few that are pushing up the price of premiums through dishonest activities. The government must take steps to stamp out this behaviour sooner rather than later.

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