Controversy over Solicitors Fees


by Karen Fleming

large quotation mark You may have read in the papers that The Association of British Insurers has claimed that lawyers' fees are pushing up the cost of motor insurance.  The organisation says excessive fees add £40 to the average motor insurance premium.

Nick Starling, Director of General Insurance and Health, Association of British Insurers, told Radio 5’s Wake Up To Money:

"We went to our members. We asked them how much they paid out in claims and how much they had paid out to the legal profession and it came to something like £2.7 million a day and we think that's too high.”
"The system is also very slow and cumbersome and it racks up costs. What we want is a system which delivers redress to genuine claimants quickly.”
"We introduced a new scheme for low value claims. It is a web-based scheme. We think that that should be extended and expanded so it covers more claims.”
"For every pound that insurers pay, something like 87p goes to lawyers and that can't be right.”
"No one denies that in some circumstances you'll need lawyers … but what we're saying is that for the very straightforward simple claims you don't need massive legal processes.”
"(Some people) have, before the event, legal insurance wrapped up, and that's a very good way of dealing with the claims that you want to take forward.”
"We have a very sensible set of reforms which has been proposed by Lord Justice Jackson … designed to make the system more efficient, to cut out costs (and) to discourage the activities of claims management companies, and we're very supportive of that."

It is certainly true that some claims are straight forward and so a huge amount of time is not required on legal proceedings however clients do need to be sure that the amounts they are being offered by the insurers are just and fair.

It is also true that claims can take longer to be resolved than should be the case, however in our experience this is mainly due to the insurers lack of co-operation or willingness to put forward reasonable offers in the first instance.

The introduction of the new system has helped to turn low value claims around in a shorter period of time and this is due to the insurers having to comply with strict time periods. It is unlikely however that this process can be adopted to deal with more complex claims where extensive investigation and evidence is required. As a profession, client care is extremely important and so any process which helps to reduce the amount of time taken to settle claims is welcomed but this cannot and should not be to the detriment of the client by not having access to legal advice.

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