New research shows that the North West of England is the leading hot spot for personal injury claims caused by road traffic accidents.
The Institute and Faculty of Actuaries conducted the study and discovered that 43% of the third party motor insurance claims in the area last year involved a personal injury. In North East Scotland only 13% of claims were personal injury related.
The Institute said there was a direct correlation between the number of claims for personal injury compensation and the concentration of claims management companies in an area.
Only 20% of motor insurance claims in Scotland involved an injury claim, compared to the 29% UK average. However, the Institute and Faculty of Actuaries pointed out that there were stricter controls on the payment of referral fees north of the border. The value of these fees is lower than in the rest of the UK and therefore it would appear that fewer claims management companies choose to operate in Scotland.
One of the research authors, David Brown, explained that claims management companies sell details of cases to personal injury solicitors for a fee. Claims management companies have been setting up in droves in the North of England and West London and in these areas the number of motor insurance claims involving personal injury is higher than the UK average.
Claims management companies saw their turnover increase by 50% to £377 million last year and the Institute welcomes the proposal to ban referral fees and hopes to work with the Ministry of Justice to restore a sensible system for personal injury claims.