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Reform Of Claims Process Needs To Be Expedited

The Accident Management Association has been very vocal in urging the Ministry of Justice to rethink proposals for the reform of the claims process for accident claims, particularly in the personal injury field. It is about time that the government puts words into actions to face the current problems head on.
Unfortunately, the proposals are facing opposition from various sources, and the government looks like it will be watering down the AMA’s suggestions in order to appease all sides in what has proved to be a controversial issue.
Originally, the AMA wanted a more cost effective process and to this end published a consultation paper “Case track limits and the claims process for personal injury claims” last year which sought views on major reforms to the system and a process for delivering personal injury compensation.
The paper highlighted four main areas where improvement was necessary. One example requested, that in setting fixed costs they requested adequate allowance to be included for the cost of acquiring claims and/or marketing services. Another recommendation was that tighter timescales needed to be followed in processing claims and furthermore, that there should be realistic sanctions on defendants/insurers to encourage compliance with the timescales.
Not surprisingly the recommendations met with some concern. Insurers, for example, were concerned about the timescales arguing they were impossible to meet and would just lead to fraudulent and frivolous claims slipping through the net. The Association of Personal Injury Lawyers (APIL) also contributed to the criticisms contending that the proposals would be detrimental to claimants.
The most likely conclusion to the debate is that the government will bow to union pressure and water down proposals in their mission for an overhaul of the system. For starters, the MOJ is refusing to set a new date for the release of proposals and unconfirmed sources from Whitehall are suggesting that the proposals, which were supposed to fast track the claims process and introduce fixed fees for solicitors, should have been released in the autumn but have been delayed and are set to be watered down or even abandoned.
Sadly this is an outcome that was all but expected. Union pressure probably means that the government will lean towards a more watered-down version of the initial proposals, with some insurance companies and litigation departments in law firms believing that the proposals may never be heard about again.
Unions, like brokers and insurers, are known to benefit from the referral fees solicitors pay for details of prospective personal injury clients – in this case, the union members. The government’s proposals were expected to bring an end to the referral fee system.
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