According to research findings published by the AA, car insurance rates increased to an average of £892, a rise from their previous figure of £633, over the course of the year. The problem facing UK motorists, who are already coping with massive petrol price increases, is that a massive proportion of the cost of their annual cover goes directly to pay for court costs and legal fees related to the motor accident personal injury claims industry.
It’s estimated by the Association of British Insurers that British drivers now pay approximately £2.7 million on a daily basis to lawyers out of their insurance premiums. The accident claim industry is a lucrative one for lawyers as well as claimants, with 87p being paid out in legal costs for every £1 paid to an accident victim.
Malcolm Tarling, an ABI representative, stated that there are two major shortfalls in the UK compensation system, as it not only encourages spurious legal claims but also makes it much too costly on small insurance claims due to massive legal costs. Meanwhile, things are made even worse through the actions of ‘ambulance-chasing’ solicitor firms and the claims management companies as well, Mr Tarling added.
However, the Prime Minister has come forward in support of legal reforms that would redefine the personal injury claim system in the UK. Winning claimants would have to pay legal fees out of their damages awards instead of making the losing defendants have to foot the bill.