‘Claims, blame and regulatory change’. Rebuilding reputations

on 1 April, 2013 Email this Email this - Print this Print this

The Government is now implementing a significant reduction in accident claim litigation fees awarded to personal injury solicitors.  These changes which, if adopted will result in a predicted 60% drop in income for many law firms involved in personal injury matters. Few will have sympathy for lawyers, but the consequences of this change could be far reaching.

Founder CoreLegal  member of Jon Hepburn from The Fedora Consultancy takes a look at how the current situation has emerged. This article is extracted from a recently published briefing document on reputation issues affecting law firms and solicitors. 

The public is largely unaware of these changes and will assume the ‘right to claim’ will continue to exist. The concept of ‘No win, no fee’ has become embedded in our national psyche and has altered perceptions about solicitors permanently. So in the world of legal advice on accident claims, what has happened and should anyone feel sorry for solicitors?

The growth of the ‘compensation culture’ arose in the late 1990’s when commercial organisations were encouraged by the Government to become involved in the provision of access to justice in order to reduce the financial burden on the public purse with regard to the provision of Legal Aid.

Since then a combination of incomplete regulation, ‘game-changing’ legislation, major new competitors, new technology and a huge cultural shift in attitudes towards accident claims forever altered the legal services market.

Whilst regulation and legislation struggled to catch up, an entire industry developed for a whole range of service providers profiting from the changes. Insurance companies, personal injury solicitors and doctors amongst others were all able to profit significantly. At the same time questions were being raised about some of the ethical practices and promotional activities being used by some ‘less than scrupulous’ opportunists.

The good times were continuing for claimants and solicitors, but clouds were gathering. Previously there hadn’t been the political will or, for that matter, pressure on insurer’s profit levels (many of the latter are owned by the banks, but the latter in recent years haven’t been in the best of shape financially) – and so it was agreed ‘that something must be done’.

Somebody had to pay for all this, and it wasn’t going to be the insurance industry. The insurers had to settle claims, pay success fees and other costs – not possibly what they’d bargained for back in the late 1990’s. They were however, much keener on raising premium levels, ‘capturing’ claimants and getting a referral fee selling the claims to law firms only too willing to ‘buy business’.

Statistically there is a compelling case that the market needed ‘a correction’. Why? The level of road traffic accident claims in the UK is much higher than accident claims in comparable countries (with similar traffic congestion levels), such as Germany and the Netherlands.

Saturation point has been reached; a hugely competitive accident claim litigation market had developed unlike anywhere else in Europe. On one side of which stand claimant personal injury solicitors; on the other the insurance industry, and it is the latter who seem to have succeeded in the PR battle to get the regulatory changes they were looking for – which are now in the final stages of becoming the new litigation rules for the accident claim industry.

 

If you’d like the whole briefing document in advance of future installments over the coming weeks please email jon@fedoraconsultancy.co.uk


If you've found this helpful, do subscribe to receive new posts via email or using RSS or find out more about our specialist members by clicking here.


Topics: Hot Topics · Law Firm marketing · Professional opinion · smaller law firms
Tags:

0 responses so far ↓

  • There are no comments yet ... to leave yours please use the form below.

Leave a Comment

Corelegal offers legal support services and online support to solicitors and barristers in London and across the UK
Website linkedin by The Blog Coach