No win, no fee injury claim news

Car crash claim working party report

Third-party no win, no fee injury claims are on the rise, according to a report soon to be published by the Actuarial Profession's working party on motor insurance claims.

Interestingly, although there has been a decline in the number of general third-party car accident claims, there has been a rise in no win, no fee injury claims, which have increased at a steady rate of around 9% a year since 2007.

David Brown, chair of the working party, commented, "Average claims costs have always increased year on year, but inflation has really taken off since 2009 and now sits at 21% for settled claims. Certainly the industry is settling larger claims slightly faster and this may be driving some of the headline increase. With both numbers and average costs up, the cost of settling injury claims is now growing by 30% each year."

Mr Brown also stated his belief that improved access to justice is a significant factor in why insurance companies are facing tough times; nowadays legal representation is no longer the exclusive preserve of the rich and even the most financially hard-up can make no win, no fee injury claims.

"The working party has only done limited research on why there has been such an increase.

"What is clear, however, is that the growing number of claims management companies are at the heart of it. They are driving people to claim who would not have considered claiming before not just leading to more claims but to more expensive claims (with more than one claimant on each claim).

"Claims management companies are also involving lawyers before a claim is made. When legal costs are a major component of bodily injury costs, this is a significant driver of inflation," said Mr Brown.


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