We are currently in a situation where personal injury claims are at a record level and most of these, around 70%, are linked not to health and safety but to road traffic accidents.  In addition to this legal fees, as a proportion of these claims, are at a record high of 142% of the total compensation.

Note: We are advising our Safety~net clients to take extra care to protect themselves by carrying a disposable camera and accident forms in all company vehicles, if you’d like an example accident form just let us know and we can send you a copy in Word doc format.

Figures released from the actuarial profession have shown that despite a reduction in road traffic accidents of 11%, personal injury claims have increased by 18%, costing the insurance sector an additional £400 million per year.

The upward trend in personal injury claims is likely to have a negative impact on insurance premiums as this additional cost is passed on to business with 2011 having the highest recorded number of claims to date.
David Brown, Chairman of the Institute and Faculty of Actuaries commented:

“This continuing rise in personal injury claims seems, yet again, to coincide with the growth of claims management companies. Over the period 2010 – 2011, the number of claims management companies in England and Wales increased by 20%, most notably in known accident and claims “hotspots”. And where there is a notable increase in claims management company activity in an area, there is a corresponding increase in personal injury claims.”

However, the Government does have plans to restrict the amount of money that claims management companies can make from “no win, no fee” cases by changing to damages based agreements meaning legal fees must be settled from any compenstion paid.  With this legislation having been expected in March of 2012 and then postponed to March 2013 the sharp rise in personal injury claims in 2011 could be a response to this.