Injury claims: Lose the lawyer from claims and cut costs

Peter Ashdown-Barr, chief executive, InterResolve, on the reduction of referral fees.

While I welcome a reduction in referral fees, it is not the only course of action that should be taken.

First we need to look at the root of the problem and whether injury claimants actually need lawyers in small, undisputed claims?

The difficulty stems from the fact that injury claims are almost always automatically referred to lawyers at the outset, regardless of the degree of simplicity or complexity involved, or even whether the claim will be disputed or not.

The claim is then forced to proceed down a one-size-fits-all legal process without claimants or the third party insurer getting any choice.

Why not first find out if the claim is even going to be disputed? If not, then there isn’t a legal issue. Lawyers are here to defend or enforce people’s rights.

So unless a claim is being disputed, or there is a complex issue requiring legal advice, why are lawyers automatically retained?

The market is crying out for alternatives that work better and are much more cost-effective.

Third-party assistance programmes from fault insurers come close to providing a solution and a choice for claimants as to whether they want to settle direct or seek legal representation.

However claimants still need independent advice, and this can now be obtained for them without unnecessary legal representation.

These alternatives are available at a much lower cost than legal fees, but remain largely unused.

The most important objective is to ensure claims costs and loss ratios are reduced, particularly where a claim is likely to be undisputed. Therefore why automatically refer them to lawyers?

Nobody would deny claimants’ access to justice if there is a dispute or medically complex prognosis.

However, for thousands of small claims where legitimate claimants want claims resolved without a complex process, alternatives are now available.

Liability can be established before lawyers are retained and independent medical care and claims valuation arranged – all without an unwieldy legal process and excessive costs.

If the aim is to reduce costs and loss ratios, why aren’t fleet managers choosing this alternative?