By Max Clarke

Today’s Government announcement on civil litigation reform has received a mixed welcome. While the Association of British Insurers (ABI) argue it will “put the brake on runaway legal costs and mean a better deal for genuine claimants and insurance customers”; the unions have rejected it as “yet another attempt to reduce the rights of those at work to secure justice when employers break the law.”

“This review has nothing to do with justice, it is simply lining the pockets of insurers at the expense of claimants seeking compensation for injuries caused by the negligence of others,” said Brendan Barber, General Secretary for the Trades Union Congress.

The ABI has long advocated reforms to the current system, especially reducing the high level of legal costs in settling personal injury claims, one of the major reasons for the general rise in the motor insurance premiums.

“These reforms are good news for genuine claimants, who too often struggle to get fair compensation under the current system”, said Nick Starling, the ABI’s Director of General Insurance and Health. “The ABI has long campaigned for reform that puts the genuine claimant at the heart of a simpler, faster, more cost-effective system.

“For too long ambulance-chasing lawyers and claims management firms have encouraged many people to believe that there is a compensation culture to exploit. The result has been a slower process for genuine claimants, and out of control legal costs that end up being paid for by all consumers through higher insurance premiums. Currently, for every £1 motor insurers pay out in compensation, an extra 87 pence is paid in legal costs.

“The final part of the reform process must be the abolition of referral fees and we urge the Government to ban them”