Adrian Webb from the motor insurer Esure recently said the personal injury claim culture in the UK is now worse than that in the United States.
That could all be about to change as the government promises to clamp down on the no win no fee compensation system that has been plaguing car insurance companies of late.
Motorists witnessed a rise of 33% in their car insurance premiums last year and could see a further 20% increase this year, according to the AA.
Ambulance chasing personal injury lawyers have to take the lion’s share of the blame for this along with the claims management companies that use aggressive advertising to persuade people to lodge claims for personal injury compensation.
Personal injury solicitors earn a fee from the claims management company every time they are successful and they can take out an insurance policy to cover them if they lose a case. The cost of this insurance can then be claimed back from the defendant’s insurance if the solicitor wins the case.
The government now intends to introduce strict regulations governing the way claims management companies advertise for clients. Changes will also be made to the referral fee system and the success fees for no win no fee claims will be limited.
These measures should go some way towards restoring normality to the system and ensuring that people with a genuine claim can still get compensation. Motorists will also be hoping that changes to the system will mean their car insurance premiums will stop increasing at such a ridiculous rate.