Businesses in the UK need to be freed from crippling fears of being subject to expensive personal injury compensation cases, the Association of British Insurers recently said.
The so-called ‘compensation culture’ in the UK has led to massive legal costs from accident claims, with new research indicating that compensation payments made to claimants are nearly identical to the legal fees incurred by legal professionals. ABI data indicates that 93p in legal fees is paid out by businesses and insurers for every £1 paid out in personal injury claims settlement payments to victims of accidents such as ‘slip and trip’ claims, with the industry body adding that costs have risen to the point where one large supermarket chain remarked how it took the revenue of five of its stores an entire year to pay for its court costs.
The ABI’s statements come as the Government makes the announcement that there will soon be a new system introduced to deal with personal injuries occurring at work or public liability claims made against local authorities. The new system, which has been adopted in large part from recommendations made by Lord Justice Jackson after his independent review last year, will expedite payments made to claimants with genuine claims in an effort to make the entire process more cost effective and efficient.
The ABI, while supportive of these efforts, wants to see even more done in order to safeguard businesses and insurance firms from harmful legal fees. Massive court costs have been flagged as responsible for rising premium costs in the car insurance sector, as firms need to recover their costs from their customer base in order to remain solvent.